Mae hwn yn fersiwn HTML o atodiad i'r cais Rhyddid Gwybodaeth 'Common Good Fund Accounts'.


 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The Highland Council 
 
Statement of Accounts 
 
Aithris Chunntasan  
 
2009 – 2010 
 
 

STATEMENT OF ACCOUNTS 2009/10 – CONTENTS  
Explanatory Foreword by Depute Chief Executive & Director of Finance  
   2 
 
 
Statement of Accounting Policies 
  15 
 
 
Core Financial Statements 
  
Income and Expenditure Account 
  24 
Statement of Movement on the General Fund Balance 
  25 
Statement of Total Recognised Gains and Losses  
  25 
Balance Sheet 
  26 
Cash Flow Statement 
  28 
Notes to the Core Financial Statements 
  30 
 
 
Supplementary Financial Statements 
 
Housing Revenue Account Income and Expenditure Account 
  63 
Statement of Movement on the Housing Revenue Account Balance 
  64 
Notes to the Housing Revenue Account  
  65 
Council Tax Income Account  
  66 
Notes to the Council Tax Income Account 
  66 
Non-domestic Rate Income Account  
  69 
 
 
Corporate Governance Assurance Statement 
  71 
 
 
Other Statements 
  
Pension Fund Accounts  
  74 
Common Good Funds 
  85 
Charitable, Educational and Other Trust Funds Accounts 
  90 
 
 
Group Accounts 
  
Introduction and Accounting Policies 
  95 
Group Income and Expenditure Account 
  96 
Reconciliation of the Single Entity  (Surplus)/ Deficit for the year  
 
  to the Group  (Surplus)/Deficit 
  97 
Group Statement of Total Recognised Gains and Losses  
  97 
Group Balance Sheet 
 98 
Group Cash Flow Statement  
 100 
Notes to the Group Accounts 
 102 
Group Statement on the System of Internal Financial Control 
 104 
 
 
Statement of Responsibilities for the Statement of Accounts 
 106 
 
 
Independent Auditor’s Report 
107 
 
 
Statutory Performance Indicators  
109 
 
- 1 -

EXPLANATORY FOREWORD BY DEPUTE CHIEF EXECUTIVE & 
 DIRECTOR OF FINANCE  
1. Introduction 
The Statement of Accounts reports on the financial performance of the Highland 
Council for the year ended 31 March 2010.  The Statement of Accounts excludes the 
transactions, assets and liabilities of the Pension Fund which are disclosed separately 
on pages 74 to 85 and the Common Good Funds, Charitable, Educational and other 
Trust Funds which are disclosed separately on pages 85 to 94. 
The Statement of Accounts also includes Group Accounts of the Council on pages 95 
to 105.  The Group comprises the Highland Council; its subsidiaries (Inverness and 
Nairn Common Good Funds); and its associates.  The associates are the Council’s 
share (based on the proportion of voting rights of Highland Council Members) of the 
Northern Joint Police Board; the Highland & Islands Fire Board; the Highland & 
Western Isles Valuation Joint Board, and the Highlands and Islands Transport 
Partnership. 
 
2. 
Statement of Accounts (the Accounts) 
The Accounts comprise:   
•  Accounting Policies - explain the basis of the figures included within the Accounts 
and the policy followed particularly where there is more than one acceptable basis 
• Income and Expenditure Account – using UK Generally Accepted Accounting 
Principles (UK GAAP) compliant accounting conventions it records the income 
receivable and the expenditure incurred in conducting the Council’s business.  It 
includes the value of fixed assets actually consumed and the projected value of 
retirement benefits earned by employees in the year 
•  Statement of Movement on the General Fund Balances – complying with proper 
accounting practices the General Fund records the income and expenditure which is 
taken into account in determining the Council’s budget requirement and in turn its 
Council Tax for the year.  This reconciliation statement summarises the differences 
between the surplus or deficit on the Income and Expenditure Account and the 
movement on the General Fund Balance 
•  Statement of Total Recognised Gains and Losses - presents all gains and losses in 
the year, not just those reported in the income and expenditure account 
•  Balance Sheet - reports the assets, liabilities, funds and reserves of the Council 
•  Cash Flow Statement - summarises the inflows and outflows of cash arising from 
revenue and capital transactions with third parties 
•  Notes to the Core Statements – provides detail on certain aspects contained within 
the Income and Expenditure Account, Statement of Movement on the General Fund 
Balance, Balance Sheet, Statement of Total Recognised Gains and Losses and 
Cash Flow Statement 
•  Housing Revenue Account (HRA) - reports the major elements of expenditure on the 
council housing stock and how that expenditure has been financed.  The totals on 
the Housing Revenue Account are included in the Income and Expenditure Account 
•  Council Tax Income Account - shows the gross tax income, adjustments for benefits, 
discounts, relief, deductions and provisions made for bad and doubtful debts.  The 
net income on the Account is transferred to the Income and Expenditure Account 
 
 
 
- 2 -

EXPLANATORY FOREWORD BY DEPUTE CHIEF EXECUTIVE & 
 DIRECTOR OF FINANCE  
•  Non-Domestic Rate Income Account - shows the non-domestic rates collected by 
the Council and paid into the national pool administered by the Scottish Government.  
The Account also shows the sum distributed from the national pool to the Council, 
representing the Council's share of National Non Domestic Rate (NNDR) income.  
The Council's share of the NNDR pool is transferred to the Income and Expenditure 
Account 
• Corporate Governance Assurance Statement - states the Convenor's and Chief 
Executive's view of the Highland Council's governance arrangements 
•  Statement of Responsibilities - sets out the responsibilities of the Authority and of the 
Depute Chief Executive & Director of Finance 
• Group Accounts – includes the Group Income and Expenditure Account; Group 
Balance Sheet; Group Cash Flow Statement; Group Statement of Total Recognised 
Gains and Losses and Group Statement of Internal Financial Controls 
3. 
Summary of Financial Results 
(a)  
Balances 
The movements and balances on the Council’s revenue reserves for 2009/10 are 
summarised below. 
Balance 
Use of 
Balance 
as at 
earmarked 
Increase in 
Deficit 
as at 
General Fund 
01/04/09
balances 
earmarking 
09/10 
31/03/10
 £m 
£m 
£m £m 
£m 
 
 
 
 
 
 
Non-earmarked balances 
12.989
7.932 
(0.911) (6.674)
13.336
 
 
 
Earmarked balances 
 
 
Devolved School Management 
1.565

0.050 -
1.615
Spend to Save 
1.929
(0.548) 
- -
1.381
PPP2 Surplus 
2.868
(2.868) 
- -
-
Central Energy Efficiency 
0.738

0.001 -
0.739
Joint Ventures 
0.192

0.246 -
0.438
IT Investment 
3.121
(2.054) 
- -
1.067
Building Maintenance Costing Project 
-

0.500 -
0.500
Winter Maintenance 
1.415
(0.396) - 
-
1.019
Energy Investment Fund 
1.062
(0.588) 
- -
0.474
Learning Disability Reprovisioning 
0.555

0.001 -
0.556
Highland 2007 Legacy 
0.440
(0.228) - 
-
0.212
Caithness Heat and Power Limited 
2.070
(1.250) 
- -
0.820
Caithness Heat and Power (procurement)
-

0.113 -
0.113
Total earmarked balances 
15.955
(7.932)
0.911 -
8.934
 
Total General Fund 
28.944

- (6.674)
22.270
 
 
Housing Revenue Account 
8.804 


-
8.804
 
 
In accordance with CIPFA Guidance “Reserves and Balances in a Local Authority” the 
Council has determined that General Fund balances should be held for contingencies 
and for specific initiatives.  The Council keeps its level of balances under review and 
aims to keep a sum of up to 3% of the revenue budget, approximately £17m, to be held 
as a contingency in non earmarked balances.  A high level of earmarking for future 
 
- 3 -

EXPLANATORY FOREWORD BY DEPUTE CHIEF EXECUTIVE & 
 DIRECTOR OF FINANCE  
expenditure commitments has reduced the current level of unearmarked reserve 
however the existence of these earmarked reserves against future expenditure will 
offer protection to the non-earmarked general fund balance in the coming years.  
 
(b) 
General Fund Services 
The financial results for the General Fund Services for the year are shown below.  This 
presentation differs from that shown in the Income and Expenditure Account which is 
set out in accordance with the Best Value Accounting Code of Practice's (BVACOP) 
standard classification of services which allows comparison to be made with other 
Scottish Local Authorities.  The following presentation allows comparison of the 
2009/10 results against budget, on the basis of the Council's internal service analysis.   
 
 
Budget Actual  Over/ 
 
(Under) 
 
£m £m  £m Notes 
Education, Culture and Sport 
237.889 
237.869 
(0.020) 
 
Joint Committee for Children and 
22.147 21.973 (0.174)  
Young People 
Housing (non HRA), Property and 
9.707 9.367 
(0.340) 
Architectural Services 
 
Building Maintenance 
(0.396) 
(1.087) 
(0.691) 

Planning and Development 
7.340 
6.852 
(0.488) 

Social Work 
104.764 
106.438 
1.674 

Transport, Environment and 
67.591 67.449 (0.142)   
Community 

Chief Executive's Office 
28.923 
27.817 
(1.106) 

Finance Services 
6.391 
6.268 
(0.123) 

Housing Benefits  

(0.106) 
(0.106) 

 484.356 
482.840 
(1.516) 
 
 
 
 
 
 
Joint Board Requisitions: 
Northern Joint Police Board 
23.743 
23.710 
(0.033) 
 
Highland & Islands Fire Board 
17.984 
17.980 
(0.004) 
 
Highland & Western Isles Valuation 
2.395 2.281 
(0.114) 
10 
Joint Board 
Highlands and Islands Transport 
0.089 0.089 
-   
Partnership 
 
 
 
 
 
Non Domestic Rate Relief 
0.460 
0.515 
0.055 
 
 
 
 
 
 
Loan Charges 
47.020 
43.298 
(3.722) 
11 
Interest on Revenue Balances 
(1.150) 
(0.024) 
1.126 
12 
Interest and Investment Income 

        (0.009) 
(0.009) 
 
Total General Fund Services 
574.897 
570.680 
(4.217) 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
- 4 -

EXPLANATORY FOREWORD BY DEPUTE CHIEF EXECUTIVE & 
 DIRECTOR OF FINANCE  
 
Budget Actual  Over/ 
 
(Under) 
 
£m £m  £m Notes 
Total General Fund Services 
574.897 
570.680 
(4.217) 
 
 
 
 
 
 
Appropriations to/from Reserves 
 
 
 
 
Building Maintenance ICT system 
(0.500) 

0.500 

Caithness Heat and Power Ltd 
1.250 
1.250 

13 
Use of Repairs & Renewals Fund 
(0.039) 
0.064 
0.103 
14 
Insurance Fund 
0.318 
0.318 

 
Affordable Housing 
2.568 
2.627 
0.059 
 
Amount to be funded from 
 
578.494 574.939 
(3.555) 
taxpayers/ General Fund balance 
 
 
 
 
 
Revenue Support Grant 
(372.365) (372.366)  (0.001) 
 
Non-domestic Rates 
(91.517) 
(91.530) 
(0.013) 
 
Council Tax 
(106.370) 
(107.396) 
(1.026) 
15 
 8.242 
3.647 
(4.595) 
 
 
 
 
 
 
Unallocated pressures/growth 
0.176 

(0.176) 
16 
Single Status 

1.304 
1.304 
17 
Equal Pay 

2.066 
2.066 
17 
Supplementary estimates 
(1.372) 

1.372 
18 
 7.046 
7.017 
0.029 
 
 
 
 
 
 
Transfer from earmarked balances 
(7.321) 

7.321 
19 
Transfer to earmarked balances 
0.275 
(0.343) 
(0.618) 
20 
Deficit on earmarked General 
(7.046) (0.343)  6.703 
 
Fund balance 
 

 
 
 
 
Total General Fund deficit 
- 6.674 
6.674   
 
 
The Council's General Fund out-turn was a deficit of £6.674m for the year.  However as 
£7.021m relates to expenditure or transfers to or from earmarked reserves the impact 
on the General Fund non-earmarked balance is a small increase of £0.347m.  The 
main variations from budget during the year were as follows: 
 
1. 
The underspend for the Joint Committee for Children and Young People is 
£0.174m and is mainly attributable to Out of Authority placements 
 
2. 
The  final position on the Other Housing and Property (Non HRA) heading shows 
an underspend of £0.340m which is mainly due to vacancies in the Service and a 
budgeted grant payment being met from another budget head  
 
3. 
The Building Maintenance operation has returned a year end favourable variance 
of £0.691m mainly the result of an increase in works orders issued due to 
adverse weather conditions in the latter part of 2009/10.  £0.500m of this 
additional surplus has been earmarked for future ICT systems development work   
 
4. 
The final position for the Planning and Development service shows an 
underspend of £0.488m.  A supplementary budget estimate of £0.372m to 
 
- 5 -

EXPLANATORY FOREWORD BY DEPUTE CHIEF EXECUTIVE & 
 DIRECTOR OF FINANCE  
compensate for a severe fall in income from planning and building warrant fees 
was agreed in February.  The year end underspend has resulted from budgets 
continuing to be strictly managed in a bid to mitigate the severe impact of falling 
income and a slightly improved income position in March 2010 
 
5. 
The Social Work Service had an overspend of £1.674m for the year.  The single 
largest area of overspend is the provision of packages of care in the Independent 
Sector for People with a Learning Disability.  This area has been recognised as a 
service pressure within the budget setting process for financial year 2010/11 with  
£1.200m being allocated to this pressure 
 
6. 
The Transport, Environment and Community Service has a year end underspend 
position of £0.142m.  One of the main challenges for the Service in 2009/10 was 
responding to the prolonged adverse weather conditions.  However as resources 
across the Service were prioritised to respond to the weather event; other areas 
of the Service experienced compensating reductions in activity levels and 
consequent underspends on Road Structural and Cyclical Maintenance budgets. 
One-off recycling income and restrictions on non essential expenditure have 
further improved the position  
 
7. 
The final position for the Chief Executive’s Service (including Members) shows 
the service to be under budget by £1.106m.  The Service has restricted any non 
essential expenditure throughout the year; this has led to significant savings 
across the Service. Also funds to the value of £0.242m previously earmarked 
were not required due to ICT projects completing under budget; income from 
licenses exceeded the budget by £0.175m and the transition to the new ICT 
contract further contributed to savings 
 
8. 
The Finance Service year end position shows an underspend of £0.123m which 
is attributed to staffing vacancies being higher than provided for in the budget 
 
9. 
The Council has incurred net income on Housing Benefits of £0.106m arising 
from adjustments relating to previous years claims  
 
10.  The saving of £0.114m on the Valuation Board requisition is the Highland 
Council’s share of the Board’s underspend in 2009/10  
 
11. 
Loan charge interest and repayment costs are under budget by £3.722m.  This is 
the result of the Council having been able to take advantage of sustained and 
historically low long term borrowing rates  and favourable cash flow which not 
only reduced the overall borrowing requirement but end loaded the expenditure 
profile.  In addition, debt rescheduling undertaken in the year generated annual 
budgetary savings of approximately £1.3m   
 
12.  Due to falling interest rates, the budget for income from interest on revenue 
balances shows an adverse final position the general fund having received 
£1.126m less interest than budgeted. 
 
13. 
During the year £1.250m of a previously earmarked balance was used to meet 
the ongoing running costs of Caithness Heat and Power Ltd 
 
 
14. 
£0.100m was added to the Repair and Renewal Fund for the future maintenance 
of leisure centres.  This was made possible by a general underspend on leisure 
 
- 6 -

EXPLANATORY FOREWORD BY DEPUTE CHIEF EXECUTIVE & 
 DIRECTOR OF FINANCE  
centres in the year. Also £0.037m of the Repair and Renewal earmarked fund 
was fed into the budget for Plockton School for Traditional Music 
 
15.  Income from Council Tax was £1.026m more than budgeted for as a result of 
improved collection performance 
 
16. 
 An unallocated budget of £0.176m remained at the year end 
 
17.  The Council has increased its provision for ongoing potential costs associated 
with the implementation of Single Status and Equal Pay Agreements by £3.370m 
 
18.  The Council agreed to the following supplementary estimates: £0.372m for 
Planning and Development to reflect budget pressures arising from a severe 
drop in fee income and £1.000m to Social Work to support the implementation of 
Single Status agreements in the Service.  In the event the supplementary 
estimate to Planning and Development was not required.     
 
19. 
In addition to transfers detailed above £7.321m previously earmarked funds were 
utilised for their specific purposes 
 
20. 
The Council agreed to set aside £0.300m of balances for the CHAP procurement 
project, £0.040m for the Highland Housing Fair and £0.105m originally intended 
to meet Social Work decant costs but not required for that  purpose so it has 
been used to meet general budget pressures.  Balances were added to by a 
transfer of £0.400m from the Winter Maintenance earmarked balance and 
£0.302m from ICT Investments earmarked balance.  Additionally there was a 
transfer into the funds of £0.344m relating to the recovery of costs expended by 
the Council on behalf of the Nairn Common Good Fund in preparing for the sale 
of Sandown Land.  The movement in earmarked funds is shown on page 3. 
 
(c) 
Housing Revenue Account (HRA) 
 Budget 
Actual 
Variance 
 £m 
£m 
£m 
 
 
 
 
Staff costs 
5.243 
4.842 
(0.401) 
Other costs 
23.861 
25.784 
1.923 
Loan charges and interest 
14.350 
12.932 
(1.418) 
 43.454 
43.558 
0.104 
 
 
 
 
Income to HRA 
(43.454) 
(43.558) 
(0.104) 
 
 
 
 
Total - 


 
 
- 7 -

EXPLANATORY FOREWORD BY DEPUTE CHIEF EXECUTIVE & 
 DIRECTOR OF FINANCE  
 
The variance in other costs arises principally from the effects on the Repairs and 
Maintenance budget of the adverse weather conditions experienced in the year.  The 
underspend in loan charges of £1.418m has enabled an increase in capital expenditure 
charged to the HRA in the year; this will free up future HRA resources.  £1.120m of this 
will support the Council’s bid for Scottish Government grant for council house building.   
There was no movement on HRA balances in 2009/10. 
 
(d) 
Group Financial Results  
 
The financial results for the Group are summarised below: 
 
•  Net Expenditure before Reserves Movements 
£586.253m 
 
•  Deficit for the year 
£15.476m  
 
•  Balances available (General Fund) 
£32.611m 
 
•  Balances available (HRA) 
£8.804m 
 
•  Decrease in Net Assets  
£146.829m 
 
 
(e) Capital 
Programmes 
 
The following table shows the actual net expenditure against budget for the year: 
 
 
Net expenditure 
 
 
Over/ 
Budget Actual  (under) 
Notes 
 
£m £m  £m 
 
General Fund 
 
 
 
 
Education, Culture & Sport 
27.411 24.868 
(2.543) 

Other Housing  
0.150 
0.150               -    
 
Planning and Development 
1.979 1.339 
(0.640)  
Transport, Environmental & Community 
25.144 23.706 
(1.438) 

Social Work 
5.540 4.367 
(1.173)  
Strategic Property Management 
5.252 4.760 
(0.492)  
Accommodation Rationalisation 
0.327 0.319 
(0.008) 
 
Energy Management 
1.155 1.785 
0.630 
  
Chief Executives 
0.840 0.345 
(0.495)  
Unallocated Budget 
0.697 0.000 
(0.697) 
 
Total 
68.495 61.639 
(6.856) 

 
 
 
 
 
 
 
 
 
Housing HRA  
13.212
10.738
2.474 9 
 
 
 
- 8 -

EXPLANATORY FOREWORD BY DEPUTE CHIEF EXECUTIVE & 
 DIRECTOR OF FINANCE  
 
1. 
The  final outturn position on the ECS programme is an underspend of £2.543m 
as a result of slippage on several lines of the budget including Wick High 
School, Roy Bridge Primary School and various Leisure facility projects. 
 
2. 
The Planning and Development service has an underspend on its capital 
programme of £0.640m.  Variations on projects are due to slippage.  However 
£0.144m of the slippage has been legally committed. 
 
3. 
In Transport Environmental and Community Services there is an underspend of 
£1.438m.  This was mainly the result of underspends on Inverness City 
Streetscape Works, the bridges programme, flood prevention orders and 
Raasay Ferry Terminal: due to the timing of contract awards or extreme 
weather conditions. 
 
4. 
The Social Work Service capital programme shows an underspend of £1.173m 
mainly as a result of delays to the programme whilst the review of the Care 
Home project was underway. 
 
5. 
The Strategic Property Management budget has an underspend of £0.492m at 
the end of the financial year, due mainly to slippage in Disability Discrimination 
Act works. 
 
6. 
The Energy Management budget position at the year end is an overspend of 
£0.630m due to project work starting earlier than planned. 
 
7. 
The year end position on the Chief Executive’s budget is an underspend of 
£0.495m due mainly to slippage. The Service anticipates that delayed projects 
should be complete the early part of 2010/11. 
 
8. 
The budget for funding net expenditure on the General Fund capital programme 
(£68.495m) is made up as follows: borrowing of £43.142m; Scottish 
Government general capital grant of £24.073m and use of capital receipts of 
£1.280m. 
 
9. 
The gross expenditure for HRA was £10.738m; an underspend of £2.474m.  
Income from the sale of Council Houses was £1.004m more than budgeted.  As 
a consequence the transfer from the revenue account of £2.340m is £0.668m 
more than had been planned.  The overall effect is that the requirement to 
borrow to fund the HRA capital programme is £4.146m less than budget. 
 
 
- 9 -

EXPLANATORY FOREWORD BY DEPUTE CHIEF EXECUTIVE & 
 DIRECTOR OF FINANCE  
4. 
Major Fixed Asset Acquisitions and Disposals 
The General Fund and Housing Revenue Account capital programmes are geared 
towards improving and enhancing assets owned by the Council.  During 2009/10 the 
major projects in the Education, Culture and Sport programme included the 
construction of the Highland Archive and Registration Centre, the refurbishment of 
Lochaber High School and the construction of modular units at Nairn Academy and 
Grantown Grammar.  In the Transport, Environmental and Community programme the 
major projects were structural works at the Raasay Ferry Terminal, Inverness Flood 
prevention measures, vehicle purchases and road structural works. 
 
General fund assets with a total net book value of £0.8m were sold generating capital 
receipts of £0.6m. The largest sale was the Salmon factory at Dingwall Business Park.   
 
The Housing Revenue Account programme invested £10.7m in council house stock 
and sold houses with a net book value of £3.9m generating capital receipts of £4.1m. 
 
 
5. Summary of Future Capital Investment Plans 
 
 
On 4 September 2008, the Council agreed a capital investment programme covering 
the period up to and including financial year 2011/12.  
 
The investment programme comprises planned expenditure on the school estate, 
cultural and recreational facilities, countryside and environmental improvements, social 
work facilities, roads, bridges, transport, flood prevention schemes, waste and recycling 
facilities, service points and office accommodation, energy efficiency, health and safety 
and disability access improvements and improvements to the Council’s housing stock.  
 
In summary, the gross investment programme analysed by Service is shown below.  
This summarises the programme agreed September 2008, adjusted for changes in 
grant funding, and the effects of capital projects ‘accelerated’ into 2009/10.  In relation 
to the Housing Revenue Account (HRA) capital programme, this reflects the updated 
programme reported to Council in February 2010. 
 
 2010/11 
2011/12 
Total  
 
£m  
£m  
£m  
Education, Culture and Sport  
28.3
37.7
66.0 
Planning and Development  
2.3
0.8
3.1 
Social Work  
8.0
8.2
16.2 
Transport, Environmental and 
29.8
26.4
56.2 
Community Services  
Chief Executive's Service  
0.5
1.5
2.0 
Capital discretionary fund  
0.5
0.5
1.0 
Housing and property  
7.9
11.2
19.1 
Programme slippage 
(7.6)
(11.4)
(19.0) 
(overcommitment)  
General fund services  
69.7
74.9
144.6  
Housing Revenue Account  
16.3
14.5
30.8  
Total  
86.0
89.4
175.4  
 
 
 
- 10 -

EXPLANATORY FOREWORD BY DEPUTE CHIEF EXECUTIVE & 
 DIRECTOR OF FINANCE  
 
The future programme will subsequently be updated to take account of the final out-
turn for 2009/10 and the resulting carry forward from that year. 
 
The Council is currently in the process of reviewing its capital programme, with a new 5 
year programme covering 2010/11 – 2014/15 due to be considered by the Council at 
the end of June 2010, which will supersede the current programme. 
 
 
6. 

Capital Fund  
The Council operates a capital fund to account for transactions relating to the 
Affordable Social Housing (Landbanking) initiative and capital contributions from 
developers.  Movements on the fund during the year were as follows: 
 
 
Total 
Landbanking  Developers 
Capital 
 
fund 
contributions 
Fund 
 £m 
£m 
£m 
 
 
 
 
Balance at 01 April 2009 
22.585 
3.187 
25.772 
Developers contributions received 

0.256 
0.256 
Council Tax income (second homes) 
2.626 

2.626 
Land sales 
0.181 

0.181 
Interest on balances 
0.067 
0.014 
0.081 
Expenditure (0.304) 
(0.026) 
(0.330)
Financial instruments adjustments 
0.733 

0.733 
Transfer from creditors at 01 April 2009 

1.889 
1.889 
Transfer to creditors at 31 March 2010 
- (1.645) 
(1.645)
Balance at 31 March 2010 
25.888 
3.675 
29.563 
 
During the year the Council advanced loans of £3.344m to the Highland Housing 
Alliance and received repayments of £4.834m.   
 
 
- 11 -

EXPLANATORY FOREWORD BY DEPUTE CHIEF EXECUTIVE & 
 DIRECTOR OF FINANCE  
 
 
7. 

Approved Methods and Sources of Raising Capital Finance 
Finance is only raised in accordance with legislation, and within this the Council has 
the following approved methods and sources of raising capital finance: 
 
 Fixed 
Variable 
On Balance Sheet 
 
 
Public Works Loans Board Loans 
Yes 
Yes 
European Investment Bank Loans 
Yes 
Yes 
Market Long-term Loans 
Yes 
Yes 
Market temporary Loans 
Yes 
Yes 
Local temporary Loans 
Yes 
Yes 
Local bonds 
Yes 
Yes 
Overdraft No 
Yes 
Internal (Capital Receipts and Revenue 
Balances) Yes 
Yes 
Finance Leasing 
Yes 
Yes 
 
 
 
Off Balance Sheet  
 
 
Deferred purchase/covenants    
Yes 
Yes 
 
 
 
Other Methods of Financing 
 
 
Government and EC Capital Grants 
 
 
Public Private Partnerships 
 
 
Lottery Monies  
 
 
 
All forms of funding are considered in light of the prevailing economic climate, 
regulations and local considerations.  The Depute Chief Executive & Director of 
Finance has delegated powers to take the most appropriate form of borrowing from 
approved sources. 
 
- 12 -

EXPLANATORY FOREWORD BY DEPUTE CHIEF EXECUTIVE & 
 DIRECTOR OF FINANCE  
 
8. 
Financial Reporting Standard 17 "Retirement Benefits" (FRS 17) 
FRS 17 (“Retirement Benefits”) has been adopted in preparing the Accounts for 
2009/10.  FRS 17 prescribes how employing organisations are to account for pension 
benefits earned by employees in the year and the associated pension assets and 
liabilities. 
Highland Council participates in The Scottish Teachers' Superannuation Scheme which 
is a national scheme administered by the Scottish Government;  pension assets and 
liabilities cannot be accurately allocated to each participating authority therefore FRS 
17 allows that the Accounts reflect only the cash payments made to the scheme as a 
participating employer.  The exception to this is unfunded pension enhancements for 
members of the scheme.  These payments are made through the Local Government 
Pension Scheme (LGPS) and are included in the accounting for pensions under FRS 
17. 
Other Council employees may join the LGPS which locally is the Highland Council 
Pension Fund administered by Highland Council.  In accounting for this scheme the 
Council is required to fully comply with FRS 17.  Note 38 to the Core Statements 
details the income and expenditure charged under FRS 17, based on estimates by the 
Fund's Actuary, and on the same basis shows that the Council has a net pension 
liability at 31 March 2010 of £319.086m.  The liability is accounted for within the 
Balance Sheet and through the Pension Reserve. 
The pension liability represents the best estimate of the current value of the pension 
benefits that will have to be funded by Highland Council.  The liability relates to benefits 
earned by existing or previous employees up to 31 March 2010. 
 
These benefits are expressed in current value terms rather than the cash amount that 
will actually be paid out.  This is to allow for the “time value of money”, whereby the 
value of cash received now is regarded as higher than the cash received in, for 
example, ten years time, since the money received now could be invested and would 
earn interest or returns during the ten years.  In order to adjust the pension liability 
cash flows for the time value of money a discount factor based on corporate bond rates 
is used.  The corporate bond rate used for the valuation as at 31 March 2010 is 
significantly lower than that used at 31 March 2009.  This has contributed to a 
significant increase in the estimated current value of the pension liability. 
 
The increase in liabilities has been partially offset by increases in asset values in line 
with the stock market recovery.  However this growth has been insufficient to offset the 
increase in liabilities. 
 
The calculation of current service cost for pension benefits earned is based on the 
discount rate at the start of the year.  Therefore current service costs in 2009/10 have 
not been affected by the change, at 31 March 2010, in the corporate bond rates used 
to estimate the current value of pension liabilities.  The change in rate will however 
affect the reported current service cost of pensions in 2010/11 which are therefore 
likely to be higher than those reported for 2009/10. 
Statute imposes an obligation on local authorities to meet the expenditure of the Joint 
Boards of which they are constituent members.  As a consequence Highland Council 
has additional liabilities arising from the pension deficits of Highland and Islands Fire 
Board, Northern Joint Police Board, Highland and Western Isles Valuation Joint Board 
and Highlands and Islands Transport Partnership.  Further information regarding these 
deficits can be found in the Statement of Accounts for the relevant bodies. 
 
- 13 -

EXPLANATORY FOREWORD BY DEPUTE CHIEF EXECUTIVE & 
 DIRECTOR OF FINANCE  
9.  Impact of Economic Climate 
 
The majority of council income derives from the Scottish Government via the local 
authority grant settlement.  With anticipated real term reductions arising from the UK 
Budget 2010 it is expected that this will have a significant impact on local authority 
finances.  Furthermore non Government related funding sources are also directly 
impacted by the recession – e.g. a significant reduction in the levels of planning fee 
income has again been experienced by the Council in 2009/10.  The Council is acutely 
aware of these circumstances and incorporates the anticipated effects of them into all 
of its financial planning considerations. 
 
 
 
 
 
 
 
 
 
 
 
Alan Geddes 
Depute Chief Executive & Director of Finance 
23 June 2010
 
 
- 14 -

STATEMENT OF ACCOUNTING POLICIES 
1. General 
 
The Statement of Accounts (the Accounts) for the Highland Council, the Common 
Good Funds, Trust Funds and the Pension Fund have been prepared, as far as is 
practicable, in accordance with the Code of Practice on Local Authority Accounting in 
the United Kingdom 2009:  A Statement of Recommended Practice (the SORP), and 
the Best Value Accounting Code of Practice (BVACOP) issued by the Chartered 
Institute of Public Finance and Accountancy (CIPFA) and any overriding legislative 
requirements.  In accordance with Financial Reporting Standard 18 all policies are 
judged against the objectives of relevance, reliability, comparability and 
understandability.  The Accounts have been prepared using the historical cost 
convention model modified for fixed asset revaluations to reflect the going concern 
status of the Highland Council. 
 
2. 
Changes in Accounting Policies  
 
PFI Transactions and Similar Contract 
 
SORP 2009 requires PFI transactions and similar contracts to be accounted for in a 
manner consistent with the adaptation of IFRIC 12 “Service Concession Arrangements” 
and consistent with the approach adopted by the Government’s IFRS-based Financial 
Reporting Manual (the iFREM).  Previously such transactions were accounted for in 
accordance with FRS 5 “Substance of Transactions” and SSAP 21 “Accounting for 
Leases and Hire Purchase Contracts”.   
 
The requirements apply to all contracts existing at 31 March 2009 and prior period 
adjustments have been made in respect of these contracts.  PFI properties which were 
previously “off Balance Sheet” are now recognised on the Balance Sheet along with a 
liability for the financing provided by the PFI operator.  Statutory guidance to mitigate 
any impact on the Council’s funding position is in place.   
 
Accounting for National Non-Domestic Rates (NNDR) 
 
In previous years NNDR debtors have been included in the Council’s Balance Sheet.  
SORP 2009 introduces a requirement that billing authorities should not recognise 
NNDR debtors in the Balance Sheet but instead recognise a debtor or creditor for cash 
collected from NNDR debtors as agent of the Government but not paid or overpaid to 
the Government at the Balance Sheet date.  Balances as at 31 March 2009 have been 
restated in this respect. 
 
 
- 15 -

STATEMENT OF ACCOUNTING POLICIES 
Prior year adjustments have been made as follows: 
Income and Expenditure Account 
 

 
Prior year adjustments 
 
As per 
Restated 
audited 
balance as 
accounts 31 
PFI 
at 31 March 
 
March 2009 
NNDR 
Contracts 
2009 
 £000 
£000 
£000 
£000 
 
 
Education Services 
274,742
-
(8,174) 
266,568
Other services (total) 
229,401

229,401
Joint board requisitions 
41,259
-

41,259
Corporate and democratic core 
12,238
-

12,238
Non Distributed costs 
3,242
-

3,242
Net cost of services 
560,882
-
(8,174) 
552,708
 
 
   
Gain on disposal of fixed assets 
(913)
-

(913)
Surplus on trading operations 
(89)
-

(89)
Interest payable and similar 
charges 28,211
-
10,022 
38,233
Interest and investment income 
(3,880)
-

(3,880)
Pensions interest cost and 
expected return on pension assets 
2,686
-

2,686
Net operating expenditure 
586,897
-
1,848 
588,745
 
 
   
Income (546,385)
-

(546,385)
 
 
   
Net deficit  
40,512
-
1,848 
42,360
 
 
   
 
 
   
Statement of movement on the General Fund balance 
   
 
 
   
Net deficit  
40,512
-
1,848 42,360
 
 
   
Net additional amount required by 
statute and non-statutory proper 
practices to be credited to the 
General Fund balance for the year 
(39,847)
-
(1,848) 
(41,695)
 
 
   
Movement in the General Fund 
balance for the year 

665
-
- 665
 
 
 
 
 
 
- 16 -

STATEMENT OF ACCOUNTING POLICIES 
Balance Sheet 
 
Prior year adjustments 
 
Restated 
As per audited 
balance as 
accounts 31 
at 31 March 
 
March 2009 
NNDR 
PFI Contracts 
2009 
 £000 
£000 
£000 
£000 
 
 
 
 
 
Fixed assets 
1,409,301 
-
147,769 
1,557,070 
Long term assets 
48,460 
-
(5,401) 
43,059 
Current assets 
79,116 
(781)

78,335 
Current liabilities 
(189,485)
781 
(6,774) 
(195,478)
Long term liabilities 
(760,450)

(139,667) 
(900,117)
Net assets 
586,942

(4,073) 
582,869 
 
 
 
 
 
Capital adjustment account 
700,631 
-
(4,073) 
696,558 
Other reserves 
(179,664)
-

(179,664)
Fund balances 
28,227 
-

28,227 
Revenue account balances 
37,748 
-

37,748 
Net worth 
586,942 
-
(4,073) 
582,869 
 
 
3. 
Revenue and Capital Transactions  
Activity is accounted for in the year that it takes place, not simply when cash payments 
are made or received.  In particular: 
 
•  Fees, charges and rents due from customers are accounted for as income at 
the date the council provides the relevant goods or services. 
 
•  Supplies are recorded as expenditure when they are consumed.  Where there 
is a gap between the date supplies are received and their consumption and this 
results in a significant balance then they are carried as stocks on the balance 
sheet.  
 
•  Expenditure is charged to capital as it is incurred. 
 
•  Interest payable on borrowings and receivable on investments is accounted for 
in the year to which it relates, on a basis that reflects the overall effect of the 
loan or investment.   
 
•  Where income and expenditure has been recognised but cash has not been 
received or paid, a debtor or creditor for the relevant amount is recorded in the 
balance sheet.  Where it is doubtful that debts will be settled, the balance of 
debtors is written down and a charge made to revenue for the income that 
might not be collected. 
 
•  Income and expenditure are credited and debited to the relevant service 
revenue account, unless they properly represent capital receipts or capital 
expenditure.  
 
 
- 17 -

STATEMENT OF ACCOUNTING POLICIES 
4. Fixed 
Assets 
 
Fixed assets are split in the Balance Sheet between Operational assets and Non-
Operational assets.   
 
Operational assets are further classified as: Council Dwellings; Other Land and 
Buildings; Vehicles, Plant, Furniture and Equipment; Infrastructure Assets; and 
Community Assets. 
 
Council houses are valued using a Beacon Principle in accordance with the Royal 
Institution of Chartered Surveyors (RICIS) guidance.  Other Land and Buildings are 
valued at the lower of net current replacement cost or net replacement value in existing 
use.  Vehicles, Plant, Furniture and Equipment, Infrastructure and Community Assets 
are included at historical cost where identifiable, net of depreciation. 
 
Non-operational assets are further classified as:  Investment properties, Assets under 
construction and Surplus assets, held for disposal. 
 
Non-operational assets are valued at market value with the exception of assets under 
construction which are recorded on an historic cost basis. 
 
Classification as a fixed asset is subject to a de minimus level of £0.006m for Vehicles, 
Plant & Machinery, and £0.020m for all other assets. 
 
5. 
Revaluation of Fixed Assets 
 
Robert Smail (MRICS), Property Manager, Housing and Property Services, carried out 
a number of revaluations falling due within the five year rolling programme.  The 
effective date of the revaluations was 1 April 2009.  In addition, certain Other Land and 
Buildings assets, where capital projects had been completed during the year, were 
revalued as at the date of project completion. 
 
Specific details regarding the valuation of all categories of fixed assets are shown in 
Note 21 to the Core Statements. 
 
6. 
Depreciation and Impairment 
 
Land is not depreciated unless it is subject to depletion.   
 
Operational buildings, infrastructure assets and plant & equipment have been 
depreciated on a straight line basis over the useful life of the asset.  Vehicles have 
been depreciated using the reducing balance method on the opening written down 
value. 
 
Non-operational investment properties and surplus properties have been depreciated 
on a straight line basis over the useful life of the asset. 
 
Council Dwellings have been depreciated on an annuity basis over the life of the asset. 
No depreciation is applied in the year of purchase.  A full year's depreciation is applied 
in year of disposal. 
 
The Council has suffered a reduction in the value of assets of £7.6m a result of 
impairment during 2009/10. 
 
- 18 -

STATEMENT OF ACCOUNTING POLICIES 
7. 
Charges to Revenue and Redemption of Debt 
 
All General Fund Services are subject to depreciation on all assets valued at current 
cost.  The charge made to the HRA for Council Dwellings and other HRA owned assets 
equates to the Loans Fund principal, interest and expenses.  Depreciation on non 
operational assets is charged to Non Distributed Costs in the Income and Expenditure 
Account. 
 
Loans fund debt is redeemed on an annuity basis. 
 
8. Capital 
Receipts 
 
The Council's policy on the treatment of Capital Receipts is: 
 
(i) 
capital receipts, however generated (with the exception of Housing Revenue 
Account receipts) will be  treated as a corporate resource to be allocated to 
projects according to agreed corporate criteria; and 
 
(ii) 
a capital receipt which formed part of the funding package for a particular project 
should be so applied, subject to assurance that this represented the most cost 
effective use of the resource. 
 
Any reasonable requests to earmark particular receipts will be considered on their 
respective merits and on the basis that, if only a proportion of the receipt is required to 
meet the cost of the project, any residual amount will be treated as in point (i) above. 
 
9. 

Valuation of Stock and Investments 
 
Stocks and investments are included in the Balance Sheet at the lower of cost or net 
realisable value. 
 
Income on investments is credited to revenue in the year that it is declared. 
 
10. 
Central Support Services 
 
Central Support Service costs such as the Chief Executive’s Office, Finance Services, 
Information Systems Service and the Accommodation properties are allocated to front-
line services after the deduction of corporate management, democratic core and non 
distributable costs in accordance with the BVACOP.  Some residual balances remain 
on Central Support Service Accounts after this allocation, but these are not material 
and are contained within the Central Services to the Public heading in the Income and 
Expenditure Account. 
 
The basis of allocation varies for each Service but includes number of transactions, 
floor area occupied, budgets and staff numbers.   
 
11. Provisions 
 
Provision has been made in respect of doubtful debts on Community Charge, Council 
Tax, Sundry debtors and Housing Rents. 
 
Provision has been included in the accounts for the potential cost of unsettled 
insurance claims as at 31 March 2010.  
 
 
- 19 -

STATEMENT OF ACCOUNTING POLICIES 
The potential financial impact of the Council’s guarantees in respect of Caithness Heat 
and Power Ltd has also been provided for. 
 
Provision has been made for the potential impact in the financial year of single status 
and equal pay settlements on the Council. 
 
12.  Revenue and Capital Grants 
 
Where grant awarding conditions allow, grants which are outstanding at the year end 
have been accrued.  In accordance with the conditions of the grant revenue grants 
including the Public Sector Housing Grant are matched to the expenditure to which 
they relate.  Capital grants are credited to the Capital Grants Deferred Account and the 
balance is written off over the appropriate asset life. 
 
13.  Strategy for Balances 
 
General Fund 
 
In accordance with CIPFA Guidance “Reserves and Balances in a Local Authority” the 
Council has determined that General Fund balances should be held for contingencies 
and for specific initiatives.  A sum of up to 3% of the revenue budget, approximately 
£17m, will be retained for contingent purposes while sums in excess of this figure will 
be earmarked to meet, in full or part, future projects or commitments. 
 
Housing Revenue Account 
 
The Council decides annually the application of HRA balances to housing activities.  
The overall aim, now largely achieved, is to eliminate the use of balances to cover 
operational costs and move to using balances for investment purposes only. 
 
14. Reserves 
 
Capital Adjustment Account 
 
The Capital Adjustment Account reflects the difference between the repayment of debt 
and depreciation charges together with all the capital financing transactions e.g. capital 
financed from current revenue (CFCR) and capital receipts applied.  This account is not 
a cash account and is not available for financing capital expenditure. 
 
Financial Instruments Adjustment Account 
 
The Financial Instruments Adjustment Account records the accumulated difference 
between the financing costs included in the Income and Expenditure Account and the 
financing costs required in accordance with regulations to be charged to the General 
Fund Balance.  This account is not a cash account and is not available for financing 
capital or revenue expenditure. 
 
Revaluation Reserve 
 
The Revaluation Reserve represents unrealised gains arising from the revaluation of 
fixed assets since 1 April 2007.  This reserve is not a cash reserve and is not available 
for financing capital expenditure. 
 
 
 
 
- 20 -

STATEMENT OF ACCOUNTING POLICIES 
Capital Receipts Reserve 
 
This reserve represents the capital receipts available to finance capital expenditure in 
future years. 
 
Renewal and Repair Fund 
 

The Council operates a Renewal and Repair Fund for the following purposes: 
ƒ  to fund grounds maintenance work undertaken on private land adopted 
by the Council; 
ƒ  to fund purchases of new museum pieces for Inverness Museum;  
ƒ  to fund repairs to the artificial pitch at Tain Royal Academy Community 
Complex; and 
ƒ  to fund repairs to leisure centres. 
 
Capital Fund 
 
A capital fund operates to allow the financing of capital expenditure without recourse to 
borrowing.  It may also be used to finance repayment of principal to the loans fund.  
Contributions received from developers in accordance with planning gain agreements 
under Section 75 of the Town and Country Planning (Scotland) Act 1997 are added to 
the Capital Fund and are used in accordance with the conditions of each individual 
agreement e.g. for the provision of play areas, environmental and road infrastructure 
improvements.   
 
An earmarked balance within the Capital Fund exists for a “Land Banking” initiative 
relating to the provision of affordable social housing throughout the Highlands. 
 
Details of these Reserves are contained in note 35 to the Core Financial Statements. 
 
15. Pensions 
 
Teachers 
 
The Scottish Teachers' Superannuation Scheme (STSS) is an unfunded defined 
benefit scheme administered by the Scottish Government.  The STSS is exempt from 
FRS 17 as the assets and liabilities of the scheme cannot be reliably attributed to 
participating authorities.  Therefore the Income and Expenditure Account reflects only 
the cash payments made by the Council to the Scheme during the year.  The 
exceptions to this are any unfunded pension enhancements made to scheme members 
throughout the year, these payments are administered by the LGPS and are included 
in the accounting for FRS 17. 
 
Other Employees 
 
Other employees are eligible to join the Local Government Pension Scheme (LGPS).  
The accounting for this fund is prescribed by FRS 17 “Retirement Benefits”. 
 
Financial Reporting Standard 17 “Retirement Benefits” (FRS 17) 
 
FRS 17 requires that the Accounts reflect a fair value of the assets and liabilities 
underlying the employer's obligations relating to retirement benefits and that the true 
cost of these obligations is recognised. 
 
 
 
- 21 -

STATEMENT OF ACCOUNTING POLICIES 
 
The Highland Council Pension Fund's Actuary was commissioned to undertake an 
assessment of the cost, income, assets and liabilities of the Fund attributable to 
Highland Council as at 31 March 2010.  The Actuary's assessment of the true cost of 
retirement benefits earned by employees during the year has been charged against 
Services in the Income and Expenditure Account.  The pension assets and liabilities of 
the Council are reflected in the Balance Sheet.  Under the Local Government Pension 
Reserve Fund (Scotland) Regulations 2003, the Council has established a Pensions 
Reserve to account for its long term net pension liability.  The discount rate employed 
for 2009/10 by the actuaries is the yield on the Merrill Lynch Non Gilt Sterling AA over 
15 year Corporate Bond Index with an adjustment of -0.2% to reflect the duration of the 
liabilities relative to the duration of the index. 
 
16.  Financial Instruments 
 
Assets and liabilities 
 
The fair value and carrying amount of each class of financial asset and liability is 
shown in the notes to the core financial statements. 
 
Fair value is defined as the amount for which an asset could be exchanged, or a 
liability settled, assuming that the transaction was negotiated between parties 
knowledgeable about the market in which they are dealing or willing to buy or sell at an 
appropriate price, with no motive in the negotiations other than to secure a fair price. 
 
Soft loans 
 
Loans which the Council make for policy reasons at an interest rate below the market 
rate for the type of loan are accounted for on a fair value basis.  The fair value is the 
present value of future receipts discounted using the prevailing interest rate for a 
similar loan and for an organisation with a similar credit rating.  Where material, the 
difference between cash lent and fair value is charged to the relevant service and as 
the loan is repaid the increased fair value of the loan is credited to the service, giving a 
neutral effect over the term of the loan.   
 
Compliance 
 
The Council has complied with the following: 
 
a)  It has adopted CIPFA’s Treasury Management in the Public Service Code of 
Practice 
 
b)  It has set treasury management indicators to control key financial instrument 
risks in accordance with CIPFA’s Prudential Code 
 
17. Leases 
 
Operating lease payments are charged to revenue in the year to which they relate, no 
value is carried in the Balance Sheet relating to the leased asset.   
 
Assets acquired under finance lease arrangements are recognised in the Balance 
Sheet at the present value of the minimum lease payments with the corresponding 
obligations classified as borrowing.   Payments are apportioned between the finance 
charge and the reduction of the outstanding obligation, with the finance charge being 
allocated and charged to revenue over the term of the lease. 
 
- 22 -

STATEMENT OF ACCOUNTING POLICIES 
 
18.  Covenants / Deferred Purchase Schemes 
 
The Council does not operate any covenants or other deferred purchase schemes. 
 
 
19. PFI/PPP 
Contracts 
 
Highland Council has two PFI/PPP contracts.  Existing assets are allocated to PFI/PPP 
contractors for the life of the contract during which time the contractors maintain, 
enhance and replace these assets and Highland Council pays service charges to the 
contractors.  Highland Council retains substantial risks and rewards of ownership of the 
assets allocated to the contractors during the contract term.  Assets held under these 
contracts are recorded as such in the Council’s accounts and corresponding liabilities 
are recorded as finance lease creditors.  An imputed finance charge on these liabilities 
is included in interest payable in the Income and Expenditure Account. 
Service charges paid to the PFI/PPP contractors are allocated to the Income and 
Expenditure Account to reflect the value of operating services received and the balance 
is applied to amortise the finance lease creditors over the terms of the contracts. 
 
20.  Foreign Currency Transactions 
 
Income and expenditure arising from transactions in foreign currency are converted to 
sterling at the exchange rate in operation on the date the transaction occurred.  Where 
a contracted or agreed rate exists, this is used for conversion to sterling. 
 
- 23 -

INCOME AND EXPENDITURE ACCOUNT FOR THE YEAR ENDED 31 MARCH 2010 
 
2008/09 
(restated)  
 2009/10 
Net 
Gross 
Gross 
Net 
Expenditure   
Note
Expenditure
Income 
Expenditure
£000  
  £000 £000 £000 
 
 
 
 
 
 
Council housing (Housing Revenue 
(9,597)  Account) 
 
32,840
(45,459) (12,619)
26,869  Cultural and related services 
 
37,210
(9,146) 28,064
266,568 Education 
services 
 
251,694
(11,250) 240,444
35,605 Environmental 
services 
 
46,926
(8,615) 38,311
20,718 Housing 
services 
 
74,011
(58,849) 15,162
7,236  Planning and development services 
 
14,662
(8,069) 6,593
36,978  Roads and transport services 
 
47,634
(9,527) 38,107
104,125 Social 
work 
services 
 
131,872
(26,812) 105,060
7,467  Central services to the public 
 
12,475
(9,381) 3,094
   
 
 
  Joint board requisitions 
11 
 
21,684    -  Northern Joint Police Board 
 
24,826
(1,116) 23,710
  -  Highland and Islands Fire  
17,170   Board 
 
17,980
- 17,980
  -  Highland and Western Isles 
2,316   
Valuation Joint Board 
 
2,281
- 2,281
  -  Highland and Islands Transport 
89   Partnership 
 
89
 89
   
 
 
12,238  Corporate and democratic core 

12,587
(233) 12,354
3,242 Non-distributed 
costs 

5,331
- 5,331
   
 
 
552,708  Net cost of services 
 
712,418
(188,457) 
523,961
   
 
 
(Gain)/Loss on disposal of fixed 
(913)  assets 
 
 (207)
(89)  Surplus on trading operations 

 (361)
38,233  Interest payable and similar charges 
 
 37,829
(3,880)  Interest and investment income 
 
 (2,240)
Pensions interest cost and expected 
 
2,686  return on pension assets 
38 
 10,293
   
 
 
588,745  Net operating expenditure 
 
 
569,275
   
 
 
(106,396) Council 
Tax 
 
 (107,396)
(357,836)  Revenue Support Grant 
 
 (372,366)
(82,153)  Non Domestic Rates 
 
 (91,015)
   
 
 
42,360  Net (surplus)/deficit for the year  
 
 
(1,502)
 
- 24 -

STATEMENT OF MOVEMENT ON THE GENERAL FUND BALANCE 
2008/09 
 2009/10 
(restated) 
Net 
Net 
Expenditure 
Expenditure 
£000 
£000 
 
(42,360) 
Net Income and Expenditure Account surplus/(deficit) 
1,502 
 
 
 
 
Net additional amount required by statute and non-statutory proper 
 
practices to be debited and credited to the General Fund balance 
41,695 
for the year (Notes 14 and 15) 
(8,176) 
(665) 
Movement in the General Fund balance for the year 
(6,674) 
 
 
 
29,609 
General Fund balance brought forward 
28,944 
 
 
 
 
28,944 
General Fund balance carried forward 
22,270 
 
 
 
 
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES 
 
 
 
2008/09  
2009/10 
£000  
£000 
 
 
 
(42,360) 
Net Income and Expenditure Account surplus/(deficit) 
1,502 
 
 
 
4,529 
Surplus arising on the revaluation of fixed assets 
161,569 
 
 
 
(54,831) 
Actuarial losses on pension fund assets and liabilities 
(170,001)
 
 
 
(5,874) 
Movements not attributable to the General Fund 
(8)
 
(98,536) 
Total recognised losses for the year 
(6,938) 
 
- 25 -

BALANCE SHEET AS AT 31 MARCH 2010 
31/03/09   
 
31/03/10 
(restated)   
Notes  £000 £000 
£000  
 
 
 
 
 
  Tangible Fixed Assets 
16 
 
 
 
   
 
 
 
 
  Operational assets 
 
 
 
499,419   Council 
dwellings 
 
534,829 
 
733,949    Other land and buildings 
 
868,313 
 
25,683    Vehicles, plant, furniture and equipment 
 
27,198 
 
254,521   Infrastructure 
assets 
 
267,707 
 
1,018   Community 
assets 
 
1,089 
 
1,514,590    
 
  1,699,136 
 
   
 
 
 
 
  Non-operational assets 
17 
 
 
6,140   Investment 
properties 
 
6,384 
 
25,687    Assets under construction 
 
35,591 
 
10,653    Surplus assets, held for disposal 
 
10,977 
 
42,480    
 
 
52,952 
 
   
 
 
 
1,557,070    Total Fixed Assets 
16 
  1,752,088 
 
   
 
 
 
885    Long term investments 
24 
945  
42,174    Long term debtors (net of provisions) 
29 
39,736  
 
   
 
 40,681 
1,600,129    Total long-term Assets 
 
  1,792,769 
 
   
 
 
 
 
  Current Assets 
 
 
 
4,471    Stocks and work in progress 
 
4,686  
87,580   Debtors 
 
81,122  
(33,061)    Provision for bad and doubtful debts 
33 
(34,275)  
19,239   Investments 
 
40,197  
106    Cash and bank 
 
105  
78,335    
 
 91,835 
 
   
 
 
 
1,678,464   Total 
Assets 
 
  1,884,604 
 
   
 
 
 
 
  Current Liabilities 
 
 
 
(101,373)    Borrowing repayable within 12 months 
 
(74,323)  
(6,774)    Finance Lease creditors  
 
(6,689)  
(75,947)   Creditors 
 
(64,768)  
(8,503)   Provisions 
33 
(12,967)  
(2,881)   Bank 
overdraft 
 
(6,618) 
 
(195,478)   
 
  (165,365)
 
   
 
 
 
1,482,986    Total Assets less Current Liabilities c/fwd 
 
  1,719,239 
 
   
 
 
- 26 -

BALANCE SHEET AS AT 31 MARCH 2010 
31/03/09   
 
31/03/10 
(restated)   
Notes  £000 £000 
£000  
 
   
 
 
   
 
 
 
1,482,986 
Total Assets less Current Liabilities b/fwd 
 
 
1,719,239
     
 
 
(500,829)    Borrowing repayable after 12 months 
 
(556,021)   
(139,667)    Finance lease creditors 
 
(136,171)   
(66,857)    Government grants deferred 
 
(86,006)   
(46,155)    Capital contributions deferred 
 
(46,024)   
(146,609)    Liability related to defined benefit pension schemes 
38 
(319,086)  
(900,117)    
 
 
(1,143,308)
 
   
 
 
 
582,869    Total Assets less Liabilities 
 
 
575,931
 
Financed by: 
35 
 
   
 
 
 
 
  Reserves 
 
 
 
696,558    Capital Adjustment Account 
 
737,487   
(43,227)    Financial Instruments Adjustment Account 
 
(41,053)   
8,528   Revaluation 
Reserve 
 
134,111  
(146,609)   Pensions Reserve 
 
(319,086)  
1,644    Capital Receipts Reserve 
 
996   
516,894    
 
 
512,455
 
   
 
 
 
 
  Fund balances 
 
 
 
1,321    Renewal and Repair Fund 
 
1,385   
25,772   Capital 
Fund 
 
29,563  
1,134   Insurance 
Fund 
 
1,454  
28,227    
 
 
32,402
 
   
 
 
 
 
  Revenue account balances 
 
 
 
28,944   General 
Fund 
 
22,270  
8,804    Housing Revenue Account 
 
8,804   
37,748    
 
 
31,074
 
   
 
 
 
582,869   Total 
net 
worth 
34   
575,931
 
The unaudited statement of accounts was issued on 23 June 2010 and the audited 
accounts were authorised for issue on 30 September 2010.  
 
 
 
 
Alan Geddes 
Depute Chief Executive & Director of Finance 
23 June 2010
 
- 27 -

CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2010 
31/03/09 
(restated)  
 
 
31/03/10 
£000  
Notes  £000
£000 
 
 
 
 
  Revenue Activities 
 
 
   
 
 
  Cash outflows 
 
   343,025 
  Cash paid to and on behalf of employees 
 
377,834
   321,228 
  Other operating cash payments 
 
317,604
     28,413 
  Housing Benefit paid  
 
34,033
   692,666 
  Total outflows 
 
729,471
 
   
 
 
  Cash inflows 
 
(45,616) 
  Rents (after rebates) 
 
(36,200)
 
(121,990)  Council tax receipts 
 
(125,139)
National non-domestic rates receipts from the 
(82,136)  national pool 
 (91,015)
(357,836)  Revenue support grant 
 (372,366)
(52,761)  DWP grants for benefits 
 (60,101)
(16,497)  Other government grants 
42 
(18,627)
(48,578)  Cash received for good and services 
 (51,289)
(30,716)      Other operating cash receipts 
 (38,378)
(756,130
 Total 
inflows 
 
(793,115)
 
   
 
 (63,464) 
  Net cash inflow from revenue activities 
39 
(63,644)
 
   
 
 
  Returns on investment and servicing of finance 
 
 
   
 
 
  Cash outflows 
 
26,780  
Interest 
paid 
  23,776
9,621 
  Interest element of finance lease rental payments 
 
11,978
36,401  
 
 35,754
 
   
 
 
  Cash inflows 
 
(2,968) 
  Investment income and interest received 
 
(2,729)
Net cash inflow from return on investment and 
33,433 
  servicing  
 
33,025
 
   
 
 
   
 
 
 
 
 
 
- 28 -

CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2010 
 
31/03/09 
(restated)  
 
 
31/03/10 
£000  
 
Notes  £000
£000 
 
   
 
 
 
 
  Capital activities 
 
 
 
 
   
 
 
 
 
  Cash outflows 
 
 
 
89,258 
  Purchase of fixed assets 
 
75,133 
 
7,441 
  Other capital cash payments 
 
4,898 
 
96,699 
  Total outflows 
 80,031 
 
 
   
 
 
 
 
  Cash inflows 
 
 
 
(8,641) 
  Sale of fixed assets 
 
(5,979) 
 
(23,254) 
  Capital grants received 
 
(25,569) 
 
(5,781) 
  Other capital cash receipts 
 
(10,066) 
 
(37,676) 
  Total inflows 
 (41,614) 
 
 
   
 
 
 
59,023 
  Net cash outflow on capital activities 
 
 
38,417 
 
   
 
 
 
28,992 
  Net cash outflow before financing 
40 
 
7,798 
 
   
 
 
 
 
  Management of liquid resources 
 
 
 
   (28,449) 
  Net decrease in short term deposits 
 
21,447 
 
     (7,703) 
  Net decrease in other liquid resources 
 
2,952 
 
(36,152)  
 
 
  24,399 
 
   
 
 
 
 
  Financing 
 
 
 
 
   
 
 
 
 
  Cash outflows 
 
 
 
399,083 
  Repayments of amounts borrowed 
 
469,975 
 
2,464 
  Capital element of finance lease rental payments 
 
3,581 
 
401,547  
 
 
473,556 
 
 
  Cash inflows 
 
 
 
  (25,000) 
  New loans raised 
  (125,700) 
 
 (371,151) 
  New short term borrowing 
  (376,315) 
 
 (396,151) 
  Total inflows 
 (502,015) 
 
 
   
 
 
 
5,396 
  Net cash inflow/(outflow) from financing 
41 
 
(28,459) 
 
   
 
 
 
(1,764) 
  Net decrease/(increase) in cash 
 
 
3,738 
  
 
 
 
- 29 -

NOTES TO THE CORE FINANCIAL STATEMENTS 
1. General 
2. Exceptional 
items 
3. Extraordinary 
items 
4. 
Prior period adjustments 
5. 
Corporate and Democratic Core costs 
6. Non-distributed 
costs 
7. 
Members’ allowances and expenses 
8. Employee 
remuneration 
9. Trading 
operations 
10. 
Community Care partnership schemes 
11. Related 
Parties 
12. 
Fees payable to Audit Scotland 
13. 
Long term contracts and PFI transactions 
14. 
Significance of the Statement of Movement on the General Fund Balance 
15. 
Reconciling items for the Statement of Movement on the General Fund Balance 
16. 
Movement in fixed assets 
17. 
Movement in non-operational fixed assets 
18. 
Financing of capital expenditure 
19. 
Commitments under capital contracts 
20. 
Analysis of assets held 
21. 
Valuation bases of fixed assets 
22. 
Assets recognised under PFI and similar contracts 
23. 
Liabilities arising under PFI and similar contracts 
24. 
Long term investments 
25. 
Operating lease income 
26. 
Operating lease payments 
27. 
Operating lease obligations 
28. 
Payments due under PFI and similar contracts 
29. 
Long term debtors  
30. Financial 
instrument 
balances 
31. 
Financial instrument gains and losses 
32. 
Nature and extent of risks arising from financial instruments 
33. Provisions 
34. 
Net asset analysis 
35. 
Movement on reserves 
36. Contingent 
liabilities 
37. Insurance 
fund 
38. Pension 
costs 
39. 
Reconciliation between the net surplus or deficit on the Statement of Movement 
on the General Fund Balance to the net cash inflow from revenue activities per 
the Cash Flow Statement 
40. 
Reconciliation of the movement in cash to the movement net debt 
41. 
Reconciliation of relevant movements within the financing and management of 
liquid resources 
42. 
Analysis of other government grants 
43. 
Post balance sheet events and authorisation of accounts 
 
 
- 30 -

NOTES TO THE CORE FINANCIAL STATEMENTS 
1.  General 
The Best Value Accounting Code of Practice (BVACOP), published by the Chartered 
Institute of Public Finance and Accountancy (CIPFA), sets out the standard 
classification of Services for the Income and Expenditure Account.  The BVACOP 
standard classification seeks to ensure consistency of presentation across all Scottish 
Local Authorities to allow comparisons between authorities to be made. 
The Income and Expenditure Account (I & E) is set out, as far as is practicable, in 
accordance with the BVACOP Service Expenditure Analysis. 
To allow comparison with the Council's internal service analysis and the Council's 
budgeted expenditure for the year, the Income and Expenditure Account has been re-
presented in an alternative format within the Explanatory Foreword. 
 
 
2.  Exceptional Items 
 
During the year expenditure of £4.4m (2008/09 nil) has been charged to the Income 
and Expenditure Account to cover the cost of Single Status and Equal Pay settlements. 
 
  
3.  Extraordinary Items 
 
The Council has no extraordinary items to disclose for the year to 31 March 2010 or  in 
the year to 31 March 2009. 
 
 
4.  Prior Period Adjustments 
 
In accordance with SORP 2009: PFI and similar contracts are now recognised on the 
Balance Sheet along with a liability for the funding provided by the contractors.  In 
addition, National Non-domestic Rates debtors are no longer recognised as debtors of 
the Council, rather the amount of rates collected and unpaid to the government is 
recorded as a creditor.   Prior period adjustments have been made and 2008/09 
corresponding amounts have been restated.  There is no effect on the General Fund 
balance as at 31 March 2009. 
 
 
5.  Corporate and Democratic Core costs 
Corporate and Democratic Core (CDC) comprises Democratic Representation and 
Management (DRM) and Corporate Management (CM).  DRM relates to corporate 
policy making and all other elected member based activities.  CM relates to those 
activities and costs of the general running of the authority. 
 
2008/09  
2009/10 
Net  
Expenditure 
Income  Net 
£000  
£000 
£000 
£000 
 
Democratic Representation 
 
8,257 
and Management 
8,262
- 8,262
3,981 Corporate 
Management 
4,325
(233) 
4,092
12,238 
Total 
12,587
(233) 12,354
 
- 31 -

NOTES TO THE CORE FINANCIAL STATEMENTS 
6.  Non Distributed Costs  
Non-distributed costs are excluded from the accounts of individual Services and 
comprise:  
(a) 
The whole amount of any past service contribution to meet a pension fund 
deficit, however arising. 
(b) 
The whole amount of any reduction in contribution to apply a pension fund 
surplus. 
(c) 
Charges (however calculated) for added years and early retirement. 
(d) 
The costs associated with unused shares of IT facilities. 
(e) 
The costs of shares of other long-term unused but unrealisable assets. 
(f) 
Depreciation for Non-Operational properties. 
 
 
7.  Members’ Allowances and Expenses 

 
Remuneration was paid to members in 2009/10 as follows: 
 
2008/09 
2009/10 
 
£000 
£000 
1,400 
Remuneration   
1,439 
324 
Travel and Subsistence 
280 
53 
All Other expenses 
36 
1,777 
Total 1,755 
 
 
8.  
Employee 
Remuneration 
 
In 2009/10 the number of employees receiving remuneration above £50,000, including 
redundancy and retirement pay where appropriate, are as follows: 
 
 
2008/09 
Remuneration Bandings 
2009/10 
No 
 
No 
 
87 
£ 50,000  - £ 59,999 
78 
31 
£ 60,000  - £ 69,999 
37 

£ 70,000  - £ 79,999 
11 

£ 90,000  - £ 99,999 


£100,000 - £109,999 


£110,000 - £119,999 


£140,000 - £149,999 

129  
134 
 
 
9.  Trading Operations 
 
Financial year 2009/10 is the seventh year in which the Council has been required to 
maintain statutory trading accounts for “significant trading operations” in accordance 
with the Local Government (Scotland) Act 2003 (Section 10).  The Council must 
demonstrate that each of its “significant trading operations” has achieved, at least, a 
cumulative breakeven position in the three years to 31 March 2010. 
 
- 32 -

NOTES TO THE CORE FINANCIAL STATEMENTS 
 
The Council has established 8 trading operations which operate in a commercial 
environment and generate income from fees and charges to other parts of the Council 
or other organisations.  In accordance with the Local Government (Scotland) Act 2003 
significant trading operations are required to break even over a rolling three year 
period. 
 
Details of significant trading operations are as follows: 
 
Roads and Community Works 
 
An amalgamation of Roads, Street Cleaning, Public Conveniences and Grounds 
Maintenance to enable cross working of the workforce on the various activities.  The 
financial target over three years is to make an appropriate surplus after depreciation 
charges, given trading conditions.  As a result of a change in the Council’s policy on 
purchasing vehicles and plant, previously through leasing now through capital 
purchase, depreciation charges are applied in line with the Council’s accounting 
policies.  This has resulted in a reduction of the accumulated surplus.  Allowance has 
been made for staff who have an entitlement to an equal pay compensation package. 
 
Waste Management  
 
As from 1 April 2008 refuse collection became part of waste management services.  
This resulted in the creation of a new trading operation comprising refuse collection, 
recycling and waste disposal.  A close working relationship between roads and 
community works and waste management enabled the continued cross working of 
workforces.  The financial target over three years is to make an appropriate surplus 
after depreciation charges, given trading conditions.  As a result of a change in the 
Council’s policy on purchasing vehicles and plant, previously through leasing now 
through capital purchase, depreciation charges are applied in line with the Council’s 
accounting policies.  This has resulted in a reduction of the accumulated surplus.  
Allowance has been made for staff who have an entitlement to an equal pay 
compensation package.  
 
Fishery Piers and Harbours 
 
Harbours trade commercially with vessels from the home and foreign fishing fleet.  
Transport piers are used by commercial ferry operators who pay dues for the use of the 
facilities.  The target is at least to break even after depreciation. 
 
Building Maintenance 
 
Provision of building repairs to Housing Services and other Council Services.  Income 
is generated by a combination of schedule of rates and charging an hourly rate to 
recover costs.  The target is to make the surplus determined by the Council when the 
Revenue Budget is set, which was £0.396m in 2009/10. 
 
 
- 33 -

NOTES TO THE CORE FINANCIAL STATEMENTS 
Catering 
 
Provision of catering, predominantly to schools, but also to other Council Services.  
Income is based on a cost recovery basis, with a target to make a small surplus.  
Allowance has been made for staff who have an entitlement to an equal pay 
compensation package.   
 
This activity no longer complies with the definition of a significant trading operation and 
therefore ceased to maintain statutory trading accounts as from 1 April 2010.   This 
was approved by the Council on 2 March 2010. 
 
Building Cleaning 
 
Provision of building cleaning to all Council Services.  Income is based on a cost 
recovery basis with a target to make a small surplus. Allowance has been made for 
staff who have an entitlement to an equal pay compensation package.   
 
This activity no longer complies with the definition of a significant trading operation and 
therefore ceased to maintain statutory trading accounts as from 1 April 2010.   This 
was approved by the Council on 2 March 2010. 
 
Vehicle Maintenance 
 
Provision of repairs and maintenance to the Council’s fleet of vehicles.  Income is 
generated through a job card system to recover costs along with a small profit element.  
The target is to make a small surplus. 
 
Project Design 
 
The unit is largely responsible for the design and management of capital structural 
work for Transport, Environmental and Community Services.  It also provides this 
service to the Scottish Government.  Income is generated by a time recording system 
based on recovery costs.  The target is to make a small surplus. 
 
 
Summary of Financial Results 
 
A summary of the financial results of Trading Operations is detailed below: 
 
2009/10 
 Turnover 
Expenditure 
Surplus/(deficit) 
 £000 
£000 
£000 
Roads and Community Works 
24,030 
24,619 
(589) 
Waste Management 
14,333 
15,387 
(1,054) 
Fishery Piers and Harbours 
16,259 
15,892 
367 
Building Maintenance 
16,868 
15,645 
1,223 
Catering 10,229 
9,635 
594 
Building Cleaning 
5,280 
4,502 
778 
Vehicle Maintenance 
4,059 
3,877 
182 
Project Design 
3,146 
2,939 
207 
Surplus on trading operations  
94,204 
92,496 
1,708 
 
 
- 34 -

NOTES TO THE CORE FINANCIAL STATEMENTS 
Reconciliation to Income and Expenditure Account 
 
  
 
£000 
Surplus on trading operations  
 
 
1,708 
Less internal surplus included in respective services net expenditure 
(1,831) 
Add back notional capital charges 
 
 
489 
Less interest on revenue balances  
 
 
(5) 
Surplus on trading operations as per Income and Expenditure Account 
361 
 
 
 
 
 
Cumulative surplus three years to 31 March 2010 
 
3 year 
 2007/08 
2008/09 
2009/10 
surplus/(deficit)
 £000 
£000 
£000 
£000 
Roads and Community Works 
3,477 
673 
(589) 
3,561 
Waste Management 

1,111 
(1,054) 
57 
Fishery Piers and Harbours 
(39) 

367 
331 
Building Maintenance 
424 
440 
1,223 
2,087 
Catering 132 
26 
594 
752 
Building Cleaning 
201 
93 
778 
1,072 
Vehicle Maintenance 
431 
292 
182 
905 
Project Design 
595 
502 
207 
1,304 
 5,221 
3,140 
1,708 
10,069 
 
 
10.  Community Care Partnership Schemes 
 
During 2009/10, under the Community Care and Health (Scotland) Act 2002, the 
Highland Council continued to have in place a signed Extended Local Partnership 
Agreement, known as The Highland Community Care Partnership Agreement, with 
NHS Highland as their partner body. 
 
The general objective of the Partnership is the achievement of a better quality of life for 
the people of the Highlands, including empowerment, social inclusion, and improved 
health, through ease of access to an increasingly integrated health and social care 
service. 
 
During 2009/10, the Partnership included services to older people, people suffering a 
physical disability, people with learning disabilities, and people requiring mental health 
services. 
 
The Partnership had a budget, covering all the above client groupings that amounted to 
approximately £235m during 2009/10.  The budgets are currently aligned, which means 
that each Partner organisation holds their own element of the budget and records the 
expenditure and income that relates to the part of the service for which they are 
responsible.  The Partners are committed to moving towards pooled budgets where 
appropriate opportunities arise. 
 
The Highland Council contributed approximately £81.8m (2008/09 £78.5m) in respect 
of the specific services, and this can be analysed as follows: 
 
- 35 -

NOTES TO THE CORE FINANCIAL STATEMENTS 
 
2008/09  2009/10 
£m  £m 
49.2 Older 
People 
51.3 
17.2 
People with Learning Disability 
18.5 
5.4 
People with Mental Illness 
5.1 
6.0 
People with a Physical Disability 
6.2 
0.7 
People Misusing Drugs/Alcohol 
0.7 
78.5 Total 
81.8 
 
 
These budgets cover a range of services from the assessment of needs and the 
Council’s provision of day and home care to the commissioning and purchase of care 
home places from private and voluntary sector organisations. 
 
The increase in budgets in 2009/10 is explained by the addition of £1m to the Home 
Care (Older People) budgets by the Administration of the Highland Council plus the 
increase in care home rates in the year when COSLA continued to negotiate a national 
rate with the Scottish care home sector.  Highland Council has elected to adhere to the 
national rates.  The national increase was accompanied by a matching increase (for 
the elderly sector only) in grant aided expenditure.  Highland Council has experienced 
a significant rise in the numbers of clients with a learning disability, particularly younger 
adults, and this has had a major impact on expenditure under that heading. 
 
 
11.  Related Parties  
 
The Council is required to disclose material transactions with related parties, bodies or 
individuals that have the potential to control or influence the Council or to be controlled 
or influenced by the Council.  Disclosure of these transactions allows readers to assess 
the extent to which the Council might have been constrained in its ability to operate 
independently or might have secured the ability to limit another party's ability to bargain 
freely with the Council. 
 
Central Government 
 
The Scottish Government has effective control over the general operations of the 
Council.  It is responsible for providing the statutory framework within which the Council 
operates, provides the majority of its funding in the form of grants, and prescribes the 
terms of many of the transactions that the Council has with other parties (e.g. Housing 
Benefits).  An analysis of specific Government Grants received during the year is set 
out in note 42 to the Core Statements. 
 
Police, Fire and Valuation Joint Boards and Highland and Islands Transport 
Partnership 

The Highland Council is a constituent authority of the Northern Joint Police Board, 
Highland and Islands Fire Board, Highland and Western Isles Valuation Joint Board 
and the Highlands and Islands Transport Partnership.  The net expenditure shown in 
the Income and Expenditure Account represents the Council's requisition or proportion 
of the costs of these Boards.   
The three Joint Boards and the Transport Partnership are deemed to be associates of 
the Highland Council, and are included on this basis in the Group Accounts starting on 
page 95. 
 
- 36 -

NOTES TO THE CORE FINANCIAL STATEMENTS 
Further information on the Joint Boards and the Transport Partnership can be found in 
each body’s Statement of Accounts available upon request from the Depute Chief 
Executive & Director of Finance, Highland Council, Glenurquhart Road, Inverness, IV3 
5NX. 
 
Pension Fund 
 
The Highland Council is the administering authority for the Pension Fund which 
provides pensions for those employees of the Council, Comhairle Nan Eilean Siar and 
other scheduled and admitted bodies which are eligible to join. 
 
During 2009/10, the Pension Fund had a closing deposit with the Council's loans fund 
of £2.795m (2008/09 £5.560m).  The Council paid the Pension Fund interest of 
£0.010m (2008/09 £0.103m) on the average deposits throughout the year.  The 
Council charged the Pension Fund £0.700m (2008/09 £0.692m) for expenses incurred 
in administering the Pension Fund. 
 
Subsidiaries and other related Companies 
 
During the year Highland Council had two subsidiary companies as detailed below.  
Copies of the Accounts, all of which give an unqualified audit opinion, can be obtained 
from the Company Secretary, c/o Highland Council, Glenurquhart Road, Inverness, IV3 
5NX.  These related companies have not been consolidated in the Group Accounts as 
they are considered immaterial. 
 
Highland Opportunity Limited (HOL) 
 
HOL  provides financial assistance and advice to businesses to protect and expand 
employment.  It is a company limited by guarantee with the liability of the Council 
limited to £100.  
 
The latest available audited results of the Company are as follows: 
 
Financial Year End 
Net Assets 
Loss before 
Loss after 
taxation 
 taxation 
 £000 
£000 
£000 
31 March 2009 
808 (47) 
(49) 
31 March 2008 
815 
(259) 
 (255)  
 
 
HOL holds 100% of the issued ordinary share capital in the following companies. 
 
Company 
Nature of business 
 
 
Highland Opportunity (Communities) Limited  Community projects 
Highland Opportunity (EBS) Limited 
European Information Centre 
Highland Opportunity (Investments) Limited 
Investment 
 
 
 
 
 
 
 
- 37 -

NOTES TO THE CORE FINANCIAL STATEMENTS 
The latest available audited results of these companies are as follows: 
 

Profit 
before 
Profit after 
 Net 
assets 
taxation 
taxation 
 
£000 £000 £000 
Year ended 31 March 2009 
 
 
 
Highland Opportunity (Communities) Limited 
355
11 
9
Highland Opportunity (EBS) Limited 
59

3
Highland Opportunity (Investments) Limited 
91
78 
58
 
 
 
 
Year ended 31 March 2008 
 
 
 
Highland Opportunity (Communities) Limited 
346

6
Highland Opportunity (EBS) Limited 
56

5
Highland Opportunity (Investments) Limited 
132
16 
11
 
 
Caithness Heat and Power Limited (CHAP) 
 
CHAP is a company limited by guarantee with the Highland Council as sole member.  
The principal activity of the company is to conduct preparatory work in order to procure 
and develop energy efficient heating supplies to generate electricity for onward sale 
and to install energy efficient heating systems.  Refer also to note 33 “Provisions” 
below.   
 
The latest available audited results of the Company are as follows: 
 
 
Financial Year End 
Net  
Loss before 
Loss after 
Liabilities 
taxation 
 taxation 
 £000 
£000 
£000 
31 March 2009 
4,478 3,643 
3,643 
31 March 2008 
835 664 
664 
 
 
 
12. 

  Fees Payable to Audit Scotland 
 
Fees payable to Audit Scotland in respect of external audit services undertaken in 
accordance with the “Code of Audit Practice” are made up as follows: 
 
2008/09 
 
2009/10 
£000 
 
£000 
 
 
 
319 
Audit Fee  
327 
188 Fixed 
Charge 
191 
(28) 
Rebate of prior year’s fees 

479 
Total 518 
 
 
No fees were payable to Audit Scotland in respect of any other services (2008/09 nil). 
 
 
- 38 -

NOTES TO THE CORE FINANCIAL STATEMENTS 
13.  Long Term Contracts and PFI Transactions 
  
Fujitsu Services Ltd 
 
The Council signed a contract with Fujitsu Services Ltd for the provision of ICT 
services.  The contract is for a five year period from 1 April 2010 with an option to 
extend for a further two years.  The total estimated charges over the 5 years, after 
efficiency savings, amount to £63.8m. 
 
Community Schools (Highlands) Ltd 
 
The Council signed a PPP contract with Community Schools (Highlands) Ltd on 12 
June 2001 to procure four schools for a term of 25 years from August 2002.  The 
annual unitary charge for this contact in 2009/10 was £3.266m (2008/09 £3.213m). 
This charge covers the cost of the use of the school plus an amount relating to the 
transfer of the asset to the Council at the end of the contract.   
  
The total amount payable under the contract from April 2010 until July 2027 amounts to 
£57.8m at current prices.  The Council receives Level Playing Field Support from the 
Scottish Executive towards these costs.  This support is estimated to amount to 
£26.8m over the remaining term of the contract. 
 
Alpha Schools (Highland) Ltd 
 
 
The Council signed a 30 year PPP contract with Alpha Schools (Highland) Ltd on the 
30 March 2006 for the provision of 11 schools.  After a phased introduction, all the 
school buildings are now available to the Council.  The first full year of the contract will 
be 2010/11 when the full unitary charge will be payable to Alpha Schools (Highland) 
Ltd.  
 
The total amount of unitary charge payable by the Council over the remaining term of 
the contract term is estimated to be £586.5m. (estimated cash prices).  The Council 
receives Revenue Support of £7.16m per annum from the Scottish Government 
towards these costs.  This support is estimated to amount to £200.3m over the 
remaining term of the contract. 
  
14.  Significance of the Statement of Movement on the General Fund Balance 
 
The Statement of Movement on the General Fund Balance summarises the differences 
between the outturn on the Income and Expenditure Account, which properly includes 
elements not chargeable for Council Tax calculation purposes and the movement on 
the General Fund which records the income and expenditure taken into account in 
determining the Council’s budget requirement and in turn its Council Tax for the year.   
 
The Statement of Movement on the General Fund Balance therefore shows the amount 
by which the General Fund balance has increased or decreased in the year, along with 
the opening balance and as a result the balance in the fund at 31 March 2010.  The 
General Fund balance represents funds available for future use. 
 
- 39 -

NOTES TO THE CORE FINANCIAL STATEMENTS 
15.  Reconciling items for the Statement of Movement on the General Fund Balance 
 
2008/09 
 2009/10 
£000 
 £000 
£000 
Amounts included in the Income and 
Expenditure Account but required by statute to 
be excluded when determining the Movement 

 
on the General Fund Balance for the year 
 
 
(81,393) 
Depreciation and impairment of fixed assets 
(42,416) 
 
5,501 
Government grants deferred amortisation 
11,565 
 
913 
Net gain on sale of fixed assets 
207 
 
Amount by which finance costs calculated in 
accordance with the SORP differ from the amount 
calculated in accordance with statutory 
4,088 
requirements 5,754 
 
Amount by which FRS 17 pension costs differ from 
contributions due under pension scheme 
(22,021) 
regulations 
(28,221) 
 
(92,912)    
 
(53,111) 
Amounts not included in the Income and 
Expenditure Account but required to be 

 
included by statute when determining the 
 
 
Movement on the General Fund Balance for the 
year 

25,948 
Statutory provision for repayment of debt 
28,394 
 
2,298 
Capital expenditure charged to the General Fund  
3,093 
 
Employers contributions payable to the Pensions 
Account and retirement benefits payable direct to 
21,614 
pensioners 25,745 
 
49,860  
  57,232 
Transfers to/ (from) the General Fund Balance 
that are required to be taken into account 
when determining the Movement on the 

 
General Fund Balance for the year. 
 
 
1,009 
Transfer to Capital Fund 
3,671 
 
(54) 
Transfer to/(from) Repair and Renewals Fund 
64  
402 
Transfer to Insurance Fund 
320 
 
1,357  
 
4,055 
Net additional amount required to be 
debited/(credited) to the General Fund balance 

 
(41,695) 
for the year 
 
8,176 
 
 
 
- 40 -

NOTES TO THE CORE FINANCIAL STATEMENTS 
16.  Movement in Fixed Assets 
 
Movements in fixed assets during the year were: 
 
Non 
Opera-
Vehicles, 
tional 
Other 
Plant & 
Com-
Assets 
Council 
Land & 
Equip-
Infra-
munity 
(note 
 
Dwellings 
Buildings 
ment 
structure Assets 
17) Total 
 
£000 
£000 
£000  £000 £000 £000  £000 
 
 
 
 
 
 
 
 
Gross Book Value 
 
 
At 1 April 2009 
513,011 
754,834 
29,146 
268,729
1,018  42,876 
1,609,614
Additions 10,739 
17,922 
8,360 
21,371
71 
18,383 
76,846
Disposals (3,878) 

(19) 
-

(830) 
(4,727)
Revaluations  
 34,759 
112,684 

-

913 
148,356
Impairments - 
(3,594) 
-  - 
(302) 
(3,896)
Reclassifications - 
7,524 

-

(7,524) 
-
 
 
 
 
 
 
At 31 March 2010 
554,631 
889,370 
37,487 
290,100
1,089  53,516 
1,826,193
 
 
 
 
 
 
 
 
 
 
 
 
Depreciation 
 
 
 
 
 
At 1 April 2009 
13,592 
20,885 
3,463 
14,208

396 
52,544
Charge for year 
6,210 
13,261 
6,826 
8,185

205 
34,687
On revaluations 

(13,039) 

-

    (61) 
   (13,100)
On disposals 



-

(26) 
(26)
Reclassifications - 
(50) 

-

50 -
 
 
 
 
 
 
At 31 March 2010 
19,802 
21,057 
10,289 
22,393

564 
74,105
 
 
 
 
 
 
Net Book Value  
 
 
 
 
 
 
 
 
 
At 31 March 2010 
534,829 
868,313 
27,198 
267,707
1,089  52,952 
1,752,088
 
 
 
 
 
 
 
 
 
 
 
 
At 1 April 2009 
(restated) 499,419 
 
733,949 
25,683 
254,521
1,018 
42,480 
1,557,070
 
 
- 41 -

NOTES TO THE CORE FINANCIAL STATEMENTS 
17.  Movement in non-operational fixed assets  
 
Surplus Assets 
Assets under 
awaiting 
Total  
 Investments 
Development 
disposal 
(note 16) 
 £000 
£000 
£000 
£000 
 
 
 
 
 
Gross book value 
 
 
 
 
At 1 April 2009 
6,268 
25,687 
10,921 
42,876 
Additions 1 
18,381 

18,383 
Disposals - 

(830) 
(830) 
Revaluations  
623 

290 
913 
Impairments - 

(302) 
(302) 
Reclassifications (332) 
(8,477) 
1,285 
(7,524) 
 
 
 
 
 
At 31 March 2010 
6,560 
35,591 
11,365 
53,516 
 
 
 
 
 
 
 
 
Depreciation 
 
 
 
 
At 1 April 2009 
128 

268 
396 
Charge for year 
75 

130 
205 
On revaluations 
(17) 
 
(44) 
(61) 
On disposals 


(26) 
(26) 
Reclassifications (10)  60 50 
 
 
 
 
 
At 31 March 2010 
176 

388 
564 
 
 
 
 
 
 
 
 
 
 
Net book value 
 
 
 
 
At 31 March 2010 
6,384 
35,591 
10,977 
52,952 
 
 
 
 
 
At 1 April 2009 
6,140 
25,687 
10,653 
42,480 
 
 
18.  Financing of Capital Expenditure  
 
The sources of finance for capital expenditure were as follows: 
 
2008/09 
 2009/10 
£000 
 £000 
 
 
 
52,674 Borrowing 
41,465 
23,254 Government 
grants 
25,569 
8,116 
Capital receipts applied 
5,424 
4,375 
Public and private sector contributions 
3,504 
2,298 
Capital financed from current revenue 
3,092 
1,314 Miscellaneous 
income 
1,442 
45 
EEC, ERDF and lottery grants 
68 
92,076 
 80,564 
  
 

 
- 42 -

NOTES TO THE CORE FINANCIAL STATEMENTS 
19.  Commitments under Capital Contracts 
 
The total value of legal commitments on capital contracts as at 31 March 2010 was 
£38.118m (31 March 2009 £38.242m).  Details of the major commitments by contract 
or project are as follows: 
 
 
 
Contract / Project 
£m 
Inverness South West Relief Channel flood prevention  
9,700 
Lochaber High School Refurbishment 
7,679 
Milton of Leys Primary School 
6,659 
A855 Portree to Staffin 
1,200 
Housing Stock – kitchen improvements 
1,110 
Health and Safety Works (SAM budget) 
1,075 
A835 Luirgean 
1,000 
Disability Discrimination Act works 
837 
Nairn High Street 
816 
Energy management/efficiency works 
726 
Total other commitments individually less than £500k 
7,316 
 
38,118 
 
 
20.  Analysis of Assets Held 
 

Assets Held 
 
Assets Held 
as at 
as at 
31/03/09 
31/03/10 
Number 
Number 
13,708 Council 
Dwellings 
13,615 
49 
Travelling People Sites  
49 
153 Nursery 
Schools.Units 
153 
184 Primary 
Schools 
184 
29 Secondary 
Schools 
29 
0 Special 
Schools 


Multi Agency Building 

20 Residential 
Homes 
(elderly) 
19 
8 Residential 
Homes 
(children) 


Residential Homes (learning disabilities) 

249 
Industrial and Commercial Units 
250 
48,239 
Street Lighting Units 
49,324 
577 
Parks and Open Spaces 
577 
236 
Cemeteries and Crematorium 
236 
17 Landfill 
Sites 
17 
2,418 km 
Non Principal Roads 
2,418km 
2,905 km 
Unclassified Roads 
2,924km 
  
 
- 43 -

NOTES TO THE CORE FINANCIAL STATEMENTS 
 
21.  Valuation bases of fixed assets  
 
Generally, assets are revalued on a five-yearly rolling programme by the Head of 
Property, Property and Architectural Services, Highland Council.  More specific 
details relating to the valuation of assets are: 
 
(a) Council 

Dwellings: Council houses have been valued using a Beacon Principle 
in accordance with the Royal Institution of Chartered Surveyors (RICS) guidance. 
(b)  Other Land and Buildings: valued at lower of net current replacement cost or 
net replacement value in existing use. 
 
 
 Most 

Recent 
Depreciation 
 
Revaluation date 
Rate (years) 
Schools 
1 April 2009 
60 
Residential Homes 
1 April 2005 
30-60 
Office Depots 
1 April 2005 
60 
Sports Facilities 
1 April 2005 
60 
Public Conveniences 
1 April 2005 
40-60 
 
 
(c)   Vehicles Plant and Equipment:
 valued at historic cost, net of depreciation.  
IT equipment is depreciated over 5 to 10 years; Vessels are depreciated over 40 
years and Vehicles are depreciated over 5 to 15 years. 
 
(d) 

Infrastructure Assets and Community Assets: valued at historic cost net of 
depreciation.  Coast Protection and Flood Prevention schemes, piers and harbours 
are all depreciated over 60 years.  Roads are depreciated over 30 years. Community 
Assets are made up of areas of land and as they are not subject to depletion they 
have not been depreciated. 
 
The historic cost shown for community assets is the known historic cost.  Due to the 
nature, age and history of community assets it is not possible to identify a historic 
cost for all community assets owned by the Council. 
 
The Council is not aware of any material changes in the value of assets included in 
the balance sheet at current value which are not reflected. 
 
(e) Non-operational 

assets: 
Investment Properties are valued on the basis of 
market value net of depreciation.  The most recent valuation date of industrial units 
held for investment purposes was 1 April 2005.  Assets under development are 
valued on a historical cost basis.  Surplus assets awaiting disposal are valued at 
current (market) value. 
 
 
 
 
 
 
 
 
 
 
 
- 44 -

NOTES TO THE CORE FINANCIAL STATEMENTS 
22. Assets Recognised under PFI and similar contracts 
 
2008/09  
 
2009/10 
£000  
 
£000 
 
  Gross Book Value 
 
150,078 
  As at 01 April 2009 
150,078 
0  Revaluations 
10,252 
0  Reclassifications 
7,888 
150,078 
  As at 31 March 2010 
168,218 
     
 
   Depreciation 
 
290    As at 01 April 2009 
2,309 
2,019    Charge for the year 
2,644 
2,309    As at 31 March  
4,953 
     
 
    Net Book Value 
 
147,769)    As at 31 March 2010 
163,265 
     
 
149,788)    As at 01 April 2009 
147,769 
 
 
 

23.  Liabilities arising from PFI and similar contracts 
 
2008/09  
 
2009/10 
£000  
 
£000 
 
   
 
(37,018)    As at 01 April  
(146,441) 
 
   
 
(109,423)    Repaid in year 
3,581) 
 
   
 
(146,441)    As at 31 March  
(142,860) 
 
 

24.  Long term investments 
 

31 March 2009 
 
31 March 2010 
Carrying 
Carrying 
Cost 
amount 
 
Cost 
amount 
£000 £000 
 
£000 £000
1,175 
880  Inverness Airport Business Park Ltd 
1,175 940
5 5 
Other 
investments 
5 5
1,180 885 
 
1,180 945
 
 
Highland Council holds £1.175m unsecured loan stock 2010/15 in Inverness Airport 
Business Park Ltd.  The first repayment of £0.588m was payable on 15 May 2010 but 
in accordance with an option in the terms of the agreement the company notified the 
Council that this payment would be postponed until 15 May 2011. 
 
- 45 -

NOTES TO THE CORE FINANCIAL STATEMENTS 
 
25.  Operating Lease Income 
 
2008/09 
 
2009/10 
£000 
 
£000 
 
 
 
6,498 
Aggregate rentals received in the year 
6,091 
 
 
 
Gross amounts of assets held for use in 
32,650 
operating leases 
33,005 
 
 
 
Accumulated depreciation charges on assets 
658 
held for use in operating leases  
787 
 
 
 
 
 
26.  Operating Lease Payments  
 
Rental payments made in respect of operating leases in the year were as follows:   
 
Payments 
 
Payments 
2008/09 
 
2009/10 
£000 
£000 
 
 
 
3,597 
 Land and Buildings  
3,221 
6,240 
 Vehicles, Plant & Equipment 
4,609 
9,837 
Total 7,830 
 
 
 
27.  Operating Lease Obligations  
 
At 31 March 2010 the Council was committed to making payments of £6.681m in 
respect of operating leases in 2010/11 as follows: 
 
 
Land and 
Other 
 
buildings 
operating 
Total 
leases 
leases 
 
 
 
 
Date of Expiry of Lease 
£000 
£000 
£000 
 
Before 31 March 2011 
502 1,486 
1,988
 
Between 01 April 2011 and 31 March 2015 
1,805 
1,939 
3,744
 
After 1 April 2015 
597 
352 
949
 
2,904 3,777 
6,681
 
 
 
 
 
 

 
- 46 -

NOTES TO THE CORE FINANCIAL STATEMENTS 
 
28.  Payments due to be made under PFI and similar contracts 
 

As at 31 March 2010 
 
 
 
Interest and 
Repayment of 
service 
Payments due 
liability 
charges Total 
 £000 
£000 
£000 
 
 
within one year 
3,320
18,798
22,118 
within 2 to 5 years 
17,569
97,012
114,581 
within 6 to 10 years 
21,337
100,496
121,833 
within 11 to 15 years 
27,319
102,098
129,417 
within 16 to 20 years 
28,987
93,057
122,044 
within 21 to 25 years 
35,355
88,415
123,770 
within 26 to 30 years 
8,973
16,680
25,653 
 
142,860
516,556
659,416 
 
29.  Long Term Debtors  
 

31/03/09 
 31/03/10 
£000 
 £000 
 
 
 
18,617 Police 
Joint 
Board 
17,908 
12,211 
Fire Joint Board 
11,149 
10,934 
Highland Housing Alliance 
10,306 
2,900 
Caithness Heat and Power 
4,150 
227 
House Loans  
204 
54 
Car Loans to staff 
54 
131 Other 
loans 
115 
45,074 
 43,886 
 
 
 
(2,900) 
Less provision Caithness Heat and Power 
(4,150) 
 
 
 
42,174 
Long term debtors (net of provisions) 
39,736 
 
 
- 47 -

NOTES TO THE CORE FINANCIAL STATEMENTS 
30.  Financial instruments  
The borrowings and investments disclosed in the Balance Sheet are made up of the 
following categories of financial instruments: 
 
As at 31 March 2009 
 
As at 31 March 2010 
Long 
Long 
term Current
Total  
term Current Total 
£000 £000 £000 
 
£000 £000 £000 
 
   
 
 
 
  Borrowings  
 
Financial liabilities at 
502,043 73,332
575,375 amortised cost 
563,488 41,425 
604,913
- 2,881
2,881 
Cash 
overdrawn 
- 6,618 
6,618
502,043 76,213
578,256 Total 
563,488 48,043 
611,531
 
   
 
 
 
  Investments  
 
Loans and 
885 -
885 
receivables 
945 - 
945
 
Note that Lender’s Option – Borrower’s Option (LOBO) debt of £118m is included in 
long term borrowing above but has a call date within the next 12 months. 
 
 
31.  Financial instrument gains and losses 
 
The gains and losses recognised in the Income and Expenditure Account and STRGL 
in relation to financial instruments are made up as follows: 
 
Financial 
  
liabilities 
Financial Assets 
  
Available 
Loans and 
for sale 
  
Liabilities 
receivables
assets Total 
  
£000 
£000 
£000 
£000 
  
  
  
  
  
 
 
  
Interest expense 
37,829 

-  
37,829
 
  
Losses on derecognition 


-  

Interest payable and similar 
 
 
  
 
charges 
37,830

-  
37,830
  
 
 
  
 
 
 
  
 
Interest income 

(2,240) 
-  
(2,240)
 
  
Gains on recognition 
(8) 

-  
          (8) 
 
  
 
Interest and investment income 
(8) 
(2,240) 
-  
(2,248) 
Net gain/(loss) for year 
37,822
(2,240)

(35,582)
 
 
 
 

 
- 48 -

NOTES TO THE CORE FINANCIAL STATEMENTS 
Fair values of assets and liabilities 
 
The fair value of each class of financial assets and liabilities which are carried in the 
balance sheet at amortised cost is disclosed below. 
 
Methods and assumptions in valuation techniques 
 
The fair value of an instrument is determined by calculating the net present value 
(NPV) of future cash flows to provide an estimate of the value of payments in the future 
in today’s terms. 
 
The discount rate used in the NPV calculation is the rate applicable in the market on 
the date of valuation for an instrument with the same structure, terms and remaining 
duration.  For debt, this will be the new borrowing rate since premature repayment 
rates include a margin which represents the lender’s profit as a result of rescheduling 
the loan; this is not included in the fair value calculation which ignores any motivation 
other than securing a fair price. 
 
The rates quoted in this valuation were obtained by the Council’s treasury management 
consultants from the market on 31 March 2010 using bid prices were applicable. 
 
The calculations are made using the follow assumptions: 
 
ƒ  For Public Works Loan Board (PWLB) debt, the discount rate used is the rate 
for new borrowing as per rate sheet number 072/09. 
 
ƒ  For other market debt and investments the discount rate used is the rate 
available for an instrument with the same terms from a comparable lender. 
 
ƒ  Where the exact maturity was not available interpolation techniques have been 
used. 
 
ƒ  No early repayment or impairment is recognised. 
 
ƒ  Fair values have been calculated for all instruments in the portfolio but only 
those which are materially different from the carrying value are disclosed. 
 
ƒ  The fair value of trade and other receivables is deemed to be the invoiced or 
billed amount. 
 
The fair values are calculated as follows: 
 
Fair value of liabilities carried at amortised cost 
 
Carrying 
As at 31 March 2010 
amount Fair 
value 
 £000 
£000 
PWLB - maturity 
445,251
502,892
LOBOs  
121,998
151,881
Market loans 
40,212
40,198
Financial liabilities 
607,461
694,971
 
 

 
- 49 -

NOTES TO THE CORE FINANCIAL STATEMENTS 
Fair value exceeds the carrying amount because the Council’s loan portfolio includes a 
number of fixed rate loans where the interest rate payable is higher than the rates 
available for similar loans at the Balance Sheet date.  This reflects the likely interest 
premium to be paid by the Council in the event of premature repayment of these loans. 
 
 
Fair value of assets carried at amortised cost 
 

Carrying 
As at 31 March 2010 
amount 
Fair value 
 £000 
£000 
Call accounts 
30,194
30,194 
Fixed term deposits 
10,000
10,003 
Financial assets 
40,194
40,197 
 
Fair value exceeds the carrying amount because the Council’s investment portfolio 
includes a number of fixed rate deposits where the interest rate receivable is higher 
than the rates available for similar loans at the Balance Sheet date. 
 
 
32.  Nature and extent of risks arising from financial instruments
  
 
The activities of the Council expose it to a variety of financial risks: 
 
• 
Credit risk – the possibility that other parties might fail to pay amounts due to 
the Council. 
 
• 
Liquidity risk – the possibility that the authority might not have funds available to 
meet its commitments to make payments. 
 
• 
Market risk – the possibility that financial loss might arise for the authority as a 
result of changes in such measures as interest rates and stock market 
movements. 
 
The Council’s overall risk management programme focuses on the unpredictability of 
financial markets and seeks to minimise potential adverse effects on the resources 
available to fund services.  Risk management is carried out by a central treasury team, 
under policies approved by the Audit and Scrutiny Committee.  The Council provides 
written principles for overall risk management as well as written policies covering 
specific areas such as interest rate risk, credit risk and the investment of surplus cash. 
 
Credit risk
 
 
Credit risk arises from deposits with banks and financial institutions, as well as credit 
exposures to the Council’s customers.  Deposits are not made with banks and financial 
institutions unless they are rated independently by Fitch with a minimum score of 
F1,A,B,3.  The authority has a policy of not lending more than £15m of its surplus 
balances to one institution for a maximum period of 364 days. 
 
The Council does not offer credit terms to customers.  All trade and other payables are 
due to be paid on the invoice date. 
 
 
- 50 -

NOTES TO THE CORE FINANCIAL STATEMENTS 
The following analysis summarises the Council’s potential maximum exposure to credit 
risk, based on experience of default and uncollectability over the last five financial 
years, adjusted to reflect current market conditions.   
 
Historical 
experience 
adjusted 
for market 
Estimated 
Amount 
conditions 
maximum 
at 31 
Historical 
at 31 
exposure to 
March 
experience 
March 
default and 
 
2010 
of default 
2010 
uncollectability
 £000 


£000 
 
 
 
 
 
Deposits with banks and 
 
 
 
 
financial institutions 
18,747 



 
 
Debtors 
 
The Council does not generally have negotiable credit terms for customers as any 
overdue amount is payable immediately.  Sundry debtors can be analysed by age as 
follows: 
   
Sundry 
 
Debtors  
 £000 
Less than three months 
5,252
Three to six months 
508
Six to twelve months 
674
More than twelve months 
3,068
 9,502
Bad debt provision 
(1,530)
Total debtors 
7,972
 
 
 
Market risk 
 
Interest rate risk 
 
The Council is exposed to interest rate risk in two different ways; the first being the 
uncertainty of interest paid or received on variable rate instruments and the second 
being the affect of fluctuations in interest rates on the fair value of an instrument. 
 
The current interest rate risk for the Council is summarised below: 
 
ƒ  Decreases in interest rates will affect interest earned on variable rate 
investments, potentially reducing income credited to the Income and 
Expenditure Account. 
ƒ  Increases in interest rates will affect interest paid on variable rate borrowings, 
potentially increasing interest expense charged to the Income and Expenditure 
Account. 
 
 
- 51 -

NOTES TO THE CORE FINANCIAL STATEMENTS 
ƒ  The fair value of fixed rate financial assets will fall if interest rates rise.  This will 
not affect the Balance Sheet for the majority of assets held at amortised cost, 
but will impact on the disclosure note for fair value.  It would have a negative 
effect on the Balance Sheet for those assets held at fair value in the Balance 
Sheet, which would be reflected in the Statement of Total Recognised Gains 
and Losses. 
 
ƒ  The fair value of fixed rate financial liabilities will rise if interest rates fall.  This 
will not affect the Balance Sheet for the majority of liabilities held at amortised 
cost but will have an impact on the disclosure note for fair value. 
 
The Council has a number of strategies for managing interest rate risk.  The policy is to 
set upper limits for fixed and variable rate borrowings based on the Council’s annual 
financing requirements.  During periods of falling interest rates, and where economic 
circumstances make it favourable, fixed rate loans will be repaid early to limit exposure 
to losses.  The risk of loss is ameliorated by the fact that a proportion of government 
grant payable on financing costs will normally move with prevailing interest rates or the 
Council’s cost of borrowing and provide compensation for a proportion of any higher 
costs. 
 
The treasury management team has an active strategy for assessing interest rate 
exposure that feeds into the annual budget setting process and allows for any adverse 
changes to be accommodated.  The strategy is based on the officers views on interest 
rates supplemented with leading market forecasts provided by the Council’s treasury 
adviser and covers capital expenditure and associated borrowing, prudential indicators, 
the current portfolio position, prospects for interest rates, economic background, 
borrowing strategy, debt rescheduling and investment strategy.  The analysis will also 
consider whether new borrowing taken out is at fixed or variable rates. 
 
According to the assessment strategy, at 31 March 2010, if interest rates had been 1% 
higher with all other variables held constant, the financial effect would be as follows: 
 
 
 

£000s 
Increase in interest payable on variable rate borrowings 
888 
Increase in interest receivable on variable rate investments 
(543)
Increase in government grant receivable for financing costs 

Impact on Income and Expenditure Account  
345 
 
 
Decrease in fair value of 'available for sale' investment assets (no impact 
 
on STRGL) 

 
 
Decrease in fair value of fixed rate borrowing liabilities (no impact on I&E 
 
account or STRGL) 
(81,952)
 
Decrease in fair value of fixed rate investment assets (no impact on I&E 
(4)
account or STRGL) 
 
The impact of a 1% fall in interest rates would be as above but with the movements 
reversed. 
 
- 52 -

NOTES TO THE CORE FINANCIAL STATEMENTS 
Price risk 
 
The Council does not invest in equity shares.  
 
Foreign exchange risk 
 
The Council has no financial assets or liabilities denominated in foreign currencies and 
thus has no exposure to loss arising from movements in exchange rates. 
 
Liquidity Risk 
 
The Council has access to a facility to borrow from the Public Works Loans Board.  As 
a result there is no significant risk that the Council will be unable to raise finance to 
meet its commitments under financial instruments.  The Council has safeguards in 
place to ensure that a significant proportion of its borrowing does not mature for 
repayment at any one time in the future to reduce the financial impact of re-borrowing 
at a time of unfavourable interest rates.   
 
The maturity structure of financial liabilities is as follows: 
 
31/03/09 Loans 
outstanding 
31/03/10 
£000  
£000 
 
 
 
389,866 
Public Works Loans Board 
445,251 
122,192 
Market debt / LOBOs 
121,998 
63,317 Temporary 
borrowing 
40,212 
575,375 Total 
607,461 
 
 
 
73,332 
Less than 1 year 
40,212 

Between 1 and 2 years 
20,000 
20,000 
Between 2 and 5 years 
27,500 
1,792 
Between 5 and 10 years 
104,527 
480,251 
More than 10 years 
415,222 
575,375 Total 
607,461 
 
 
- 53 -

NOTES TO THE CORE FINANCIAL STATEMENTS 
33.  Provisions 
 31/03/09 
Movement 
31/03/10 
 £000 
£000 
£000 
 
(restated)   
Long term debtor provisions 
 
 
 
Loan to Caithness Heat & Power Ltd 
2,900 
1,250 
4,150 
 
 
 
 
Bad debt provision 
 
 
 
Council Tax 
21,764 
901 
22,665 
Community Charge 
6,088 
(7) 
6,081 
Housing rents (HRA) 
2,711 
(134) 
2,577 
Other rents 
1,043 
379 
1,422 
Sundry debtors 
1,455 
75 
1,530 
 33,061 
1,214 
34,275 
 
 
 
 
Other provisions 
 
 
 
Caithness Heat & Power Ltd   
6,900 

6,900 
Single status provision  

   1,771 
1,771 
Equal pay provision 
1,143 
2,635 
3,778 
Insurance provision 
460 
58 
518 
 8,503 
4,464 
12,967 
 
 
 
 
Total provisions 
44,464 6,928 
51,392 
 
 
34.  Net Asset Analysis 
 

As at 
 
As at  
 31/03/09 
31/03/10 
£000 
 £000 
 
 
 
77,487 
General Fund  
26,258 
504,417 
Housing Revenue Account 
539,145 
5,038 Trading 
Operations 
10,528 
586,942 Total 
575,931 
 
 
 
- 54 -

NOTES TO THE CORE FINANCIAL STATEMENTS 
35.  Movements on Reserves 
 
As at 31 
Surplus/ 
March 
(Deficit) 
Gains/ 
Transfers 
2009 
for the 
(Losses) in 
Between 
Closing 
 
(Restated) 
year 
year  
Reserves 
Balance 
 
£000 £000 £000  £000 £000 
Reserves 
 
 
 
 
Capital Adjustment 
Account 696,558 
40,929 


737,487 
Financial Instruments 
Adjustment Account 
(43,227) 
2,174 


(41,053) 
Revaluation Reserve 
8,528 

125,583 

134,111 
Pensions Reserve 
(146,609) 
(2,476) 
(170,001)

(319,086) 
Capital Receipts Reserve 
1,644 
(648) 


996 
 
 
 
 
 
 
Fund Balances 
 
 
 
 
Repairs and Renewals 
Fund 
1,321 - 
64 
1,385 
Capital Fund 
25,772 
120 

3,671 
29,563 
Insurance Fund 
1,134 


320 
1,454 
 
 
 
 
 
 
Revenue Account Balances 
 
 
 
 
General Fund 
28,944 
(2,619) 

(4,055) 
22,270 
Housing Revenue 
Account 8,804 



8,804 
 
 
 
 
 
 
Total  
582,869 
37,480 
(44,418)

575,931 
 
 
36.  Contingent Liabilities 
 
Mallaig Harbour Authority 
 
The Council has guaranteed a 25 year loan from the PWLB to Mallaig Harbour 
Authority.  The Harbour Authority's current loan obligations to the PWLB comprise half 
yearly repayments of principal and interest totalling £0.034m.  The balance of that loan 
as at 31 March 2010 is £0.347m. 
 
In the event of default by the Harbour Authority in making any repayment, the PWLB 
would be entitled to demand payment of those instalments by the Council. 
 
The Council in acting as loans guarantor is doing so under the powers, inter alia, of 
Section 171A of the Local Government (Scotland) Act 1973.  The Council holds 
security over the Harbour Authority's land and buildings. 
 
 
 
- 55 -

NOTES TO THE CORE FINANCIAL STATEMENTS 
Aonach Mor Development 
 
The ground used for the ski development is leased by the Highland Council from the 
owners, and sub-let to the Nevis Range Development Company.  The Council is 
obliged to remove all buildings, machinery and other items at the expiry or earlier 
termination of the leases, and to restore the let subjects to their original condition. 
Restoration may not be required if operation of the resort can be continued.  The cost 
of restoration cannot be readily quantified, but would be considerable.  The leases 
expire in 2048. 
 
Lochinver Harbour Bonded Warehouse 
 
The Council operates a bonded warehouse at Lochinver Harbour.  HM Customs & 
Excise now require an independent guarantee from a financial institution so that any 
loss of monies from unpaid duty can be collected.  The Clydesdale Bank, as bankers 
for the Council, have provided a guarantee, but require the Council to indemnify them 
against any claims and costs incurred.  The guarantee is for the sum of £20,000. 
 
 
Scottish Redundant Churches Trust  
 
The Council agreed in April 2007 to act as guarantor for the Scottish Redundant 
Churches Trust in respect of a loan of £250,000 from the Architectural Heritage Fund 
for the restoration of Cromarty East Church. 
 
 
Equal Pay and Job Evaluation 
 
In common with other Scottish Local Authorities, the Council is progressing 
arrangements to modernise employment conditions for staff by implementing a new 
pay structure; effective from 1 April 2008 and harmonised conditions of service which 
will be implemented from 1 September 2010. 
 
Equal pay settlements covering the period prior to 1 April 2008 have been reached with 
approximately 2,500 staff.  Based on historical experience a provision of £5.549m has 
been made as at 31 March 2010 to meet the costs of any outstanding Equal Pay 
claims or appeals against job evaluation outcomes and any other related liabilities.  A 
contingent liability has been recognised for potential claims coming forward additional 
to the types of claims which have been considered to date.  
 
 
Teachers maternity pay 
 
A recent amendment to the Scottish Negotiating Committee for Teachers Handbook of 
Conditions of Service has confirmed that teachers on maternity leave continue to 
accrue annual leave entitlement.  This could result in claims for payments covering 
leave accrued since October 2008.  At this time there is no indication as to the potential 
level of claims and payments or the amounts involved therefore no provision has been 
made in the accounts to 31 March 2010.  
 
 
 
 
 
 
 
- 56 -

NOTES TO THE CORE FINANCIAL STATEMENTS 
Landfill penalties  
 
The Council did not meet its target for Biodegradable Municipal Waste to landfill during 
2008/09 and 2009/10.  No provision has been made in the accounts for potential 
penalties of £1.059m which are currently suspended by the Government.    
 
Scotland’s Housing Expo 
 
The Council has agreed to underwrite Scotland’s Housing Exp event which is due to 
take place during August 2010 at Milton of Leys, Inverness up to a maximum of 
£0.100m to provide resources until ticket sales income and sponsorship funding are 
received.   
  
37.  Insurance Fund 
Using powers in Schedule 3 of the Local Government Scotland Act 1975 the Council 
has established an Insurance Fund to meet uninsured losses or surpluses. Premiums 
of £0.320m charged to Services in 2009/10 were added to the fund.  This fund enables 
the Council to self insure General Fund properties against the risks of storm, flood, 
burst pipes and malicious damage. 
 
38.  Pension Costs 
 
Financial Reporting Standard 17 “Retirement Benefits” (FRS 17) prescribes how 
pension costs and liabilities are to be disclosed in the financial statements and requires 
the Council to account for retirement benefits in the period in which they commit to 
paying them although the actual payment of these benefits may be many years in the 
future. 
 
Teachers 
 
The accounting requirements of the Teachers Superannuation Scheme are exempt 
from FRS 17 as the assets and liabilities cannot be attributed to individual authorities. 
 
The pension cost charged in the accounts is the contribution rate set by the Scottish 
Government on the basis of a notional fund.  In 2009/10 the Highland Council paid 
£14.353m (2008/09 £12.825m) to the Scottish Government in respect of teachers 
pension costs, which represents 14.9% (2008/09 13.50%) of teachers pensionable pay.   
 
In addition the Highland Council is responsible for all pension payments relating to 
added years it has awarded, together with the related increases.  In 2009/10 these 
amounted to £0.81m (2008/09 £0.81m) representing 0.85% (2008/09 0.85%) of 
pensionable pay. 
 
 
Other Employees 
 
Employees are admitted to the Highland Council Pension Fund which administers the 
Local Government Pension Scheme.  This is a defined benefit final salary scheme.   In 
addition the Council has liabilities for discretionary pension payments outside the main 
scheme. 
 
- 57 -

NOTES TO THE CORE FINANCIAL STATEMENTS 
Employers contributions are set to meet the overall liabilities of the Fund in full in 
accordance with pension regulations.  Contributions paid by the Council into the 
Highland Council Pension Fund in 2009/10 represent 17.05% of total pensionable pay 
(2008/09 17.13%).  Contributions of £23.841m (2008/09 £21.001m) are estimated to be 
paid into the scheme in 2010/11. 
 
The principal actuarial assumptions adopted as at 31 March 2010 are as follows: 
 
a.  The discount rate used is the yield on the iBoxx AA rated over 15 year 
corporate bond index. 
 
b.  The expected return on assets is based on the long term future expected 
investment return for each asset class as at 1 April 2009.  The return on gilts 
and other bonds are assumed to be the gilt yield and corporate bond yield (with 
an adjustment to reflect default risk) respectively at the relevant date.  The 
return on equities and property is assumed to be a margin above gilt yields. 
 
c.  The following expected returns have been adopted: 
 
Asset class 
Expected return 
as at  01/04/08 

 

Equities 7.4 
Gilts 4.0 
Bonds 6.5 
Property 5.4 
Cash 3.0 
 
 
d.  The financial assumptions used for FRS 17 calculations are as follows: 
 
As at  
31/03/10
31/03/09
31/03/08 
 
% % % 
Price 
Increases 
3.9 3.0 3.7 
Salary 
Increases 
5.4 4.5 5.2 
Pension 
Increases  3.9 3.0 3.7 
Discount 
Rate 
5.5 6.7 6.6 
 
 
e.  The assumed life expectations from age 65 are: 
 
 
Retiring today 
Retiring in 20 years 
Males 18.87 
19.88 
Females  
21.91 
22.98 
 
f.  It has been assumed that 50% of retiring members will opt to increase their 
lump sums to the maximum allowed. 
 
 
- 58 -

NOTES TO THE CORE FINANCIAL STATEMENTS 
Present value of Scheme liabilities: Reconciliation for the year to 31 March 2010 
 

31/03/09  
31/03/10 
£000 
 £000 
   
 
655,864  Opening value 
591,256 
18,998  Current service cost 
16,341 
42,639 Interest 
cost 
  39,616 
(113,298) Actuarial loss/(gain) 
323,029 
(19,349)  Estimated benefits paid (net of transfers in) 
(22,735) 
7,126  Contributions by scheme participants 
8,401 
(1,061)  Unfunded pension payments 
(2,093) 
240  Past service cost 
1,113 
97 Losses 
on 
curtailments 
474 
591,256  Closing value 
955,402 
 
Fair value of Scheme assets: Reconciliation for the year to 31 March 2010 
 

31/03/09  
31/03/10 
£000 
 £000 
   
 
564,493  Opening value 
444,647 
39,953  Expected return on Scheme assets 
29,323 
(168,129)  Actuarial loss/(gain)  
153,028 
21,614  Contributions by employer 
25,745 
7,126  Contributions by Scheme participants 
8,401 
(20,410)  Estimated benefits paid (net of transfers in)   
(24,828) 
444,647  Closing value 
636,316 
 
(130,148)  Actual return on Scheme assets 
     153,028 
 
History of Pension Reserve  
 

Year ended  
31/03/10
31/03/09
31/03/08
31/03/07   31/03/06 
 
£000 
£000 £000 £000  £000 
 
 
Present value of liabilities 
(955,402) (591,256) (655,864) (678,403) (668,040)
Fair value of assets 
636,316
444,647
564,493
592,091 535,343
Deficit 
(319,086) (146,609)
(91,371)
(86,312) (132,697)
 
Assets prior to 31 March 2009 are shown at bid price (estimated where necessary) 
 
History of Experience Adjustments 
 
Year ended 
31/03/10
31/03/09
31/03/08
31/03/07 31/03/06 
 % 
% % %  % 
% Experience adjustments on 
scheme liabilities of total 
liabilities 
0.9 
2.1 0.0
0.0 
6.7
% Experience adjustments on 
scheme assets of total assets 
24.0 
(37.8) (13.3)
1.6  14.2
 
- 59 -

NOTES TO THE CORE FINANCIAL STATEMENTS 
The following table analyses the pension scheme entries included in the Statement of 
Recognised Gains and Losses: 
 
 
2008/09  
2009/10 
£000  
£000 
113,298 
Actuarial (loss)/gain on pension liabilities  
(323,029) 
(168,129) 
Actuarial gain/(loss) on pension assets  
153,028 
(54,831) 
Total recognised losses for the year 
(170,001) 
 
 
Estimated Asset Allocation 
 

2008/09  
2009/10 
%  

 
 
 
73 Equities 
79 
5 Gilts 

8 Other 
Bonds 

11 Property 

3 Cash 

100 Total 
100 
 
 
The Income and Expenditure Account recognises the true economic cost of retirement 
benefits earned by employees in 2009/10 irrespective of when benefits are due to be 
paid.  The following table summarises the entries reflected within the Income and 
Expenditure Account in respect of accounting for pension costs under FRS 17. 
 
 
2008/09 
 
2009/10 
£000 
 
£000  
£000  
£000
   
   
   
   
21,614  Employers pension contributions 
   25,745
   
   
   
   
  Less FRS17 charges 
   
18,998   
  Current service cost 
16,341  
240   
  Past service cost 
1,113  
97   
  Settlements and curtailments 
474  
42,639  
 Interest 
costs 
39,616  
(39,953)   
  Expected return on assets 
(29,323)  
   (22,021)  
   (28,221)
   
(407)  Contribution to pension reserve 
  
(2,476)
 
 
- 60 -

NOTES TO THE CORE FINANCIAL STATEMENTS 
39.  Reconciliation between the net surplus or deficit on the Statement of 
Movement on the General Fund to the net cash inflow from revenue activities per 
the Cash Flow Statement 
 
2008/2009  2009/2010 2009/2010
£000 
 £000 
£000 
 
 
 
 
42,360 
Income and Expenditure Account deficit  
 
(1,502) 
 
 
 
 
 
Non cash items 
 
 
(407)  FRS 17 transactions 
(2,476) 
 
(81,393) Depreciation 
(42,416) 
 
  Amortised Government grants and capital 
11,565  
5,501 
contributions 
1,605 
Impact of financial instruments 
953 
 
913 
Gain/loss on sale of assets  
206 
 
(73,781)  
  (32,168) 
  Items on accruals basis 
 
 
1,083 Increase 
in 
stock 
216 
 
6,377 
Decrease in debtors 
6,622 
 
(10,878) Increase 
in 
Creditors 
3,142 
 
5,731 Increase 
in 
provisions 
(6,929) 
 
2,313  
 
3,051 
 
Items treated as servicing of finance 
 
 
(37,324) Interest 
paid 
(35,754) 
 
2,968 
Interest received  
2,729 
 
(34,356)  
  (33,025) 
 
 
 
 
(63,464)  Net cash inflow from revenue activities  
 
(63,644) 
 
 
40.  Reconciliation of the movement in cash to the movement in net debt 
 
 
Analysis of net debt 
1 April 2009 
Cash Flow 
31 March 2010
 £000 
£000 
£000 
Cash in hand 
106 
(1) 
105 
 
 
 
Overdrafts 
(2,881) 
(3,737) 
(6,618) 
   
(2,775) (3,738)  (6,513) 
 
 
 
 
Debt due within one year 
(70,091) 
23,285 
(46,806) 
Debt due after one year 
(647,915) 
(51,744) 
(699,659) 
  
(718,006) (28,459) (746,465) 
 
 
 
 
Current asset investments 
18,747 
21,447 
40,194 
Other liquid resources  
3,612 
2,952 
6,564 
  
22,359 24,399 46,758 
 
 
 
 
Total   
 
(698,422) (7,798) 
(706,220) 
 
 

 
- 61 -

NOTES TO THE CORE FINANCIAL STATEMENTS 
41. Reconciliation of relevant movements within the financing and 
management of liquid resources 
 
 
 1 
April 
 
31 March 
 2009 
Cash flow 
2010 
 £000 
£000 
£000 
Management of Liquid Resources 
 
 
 
Short Term Investments 
18,747 
21,447 
40,194
Other Liquid Resources 
3,612 
2,952 
6,564
 22,359 
24,399 
46,758
 
 
 
Management of Financing 
 
 
Temporary Loans 
(63,317) 
23,199 
(40,118)
PWLB Loans 
(389,851) 
(55,400) 
(445,251)
Money Market Loans 
(118,397) 
160 
(118,237)
Finance Lease Creditors 
(146,441) 
3,582 
(142,859)
Net Financing - per Cash Flow 
(718,006) 
(28,459) 
(746,465)
Statement 
  
42.  Analysis of Other Government Grants 
 

2008/09   2009/10 
£000 
 £000 
 
 
 
 
(12,501) Housing 
Benefit 
(13,158) 
 
 
 
 Specific 
Grants 
 
(963) Gaelic 
(2,470) 
(1,039) Determined 
to 
succeed 
(1,040) 
(431) Supported 
Employment 

(1,563) 
Fairer Scotland Fund 
(1,959) 
 
 
 
(16,497)  
(18,627) 
 
 
43.  Post Balance Sheet Events and Authorisation of Accounts 
 
The Chancellor of the Exchequer announced in his emergency budget on 22 June 
2010 that the Consumer Price Index (CPI) rather than the Retail Price Index (RPI) will 
be the basis for future public sector pension increases.   In accordance with paragraph 
21 of Financial Reporting Standard 21 (Events after the balance sheet date), this 
change is deemed to be a non-adjusting post balance sheet event.  It is estimated that 
this change will reduce the value of an average employer’s FRS 17 liabilities in the fund 
by around 6-8%.  
 
On 24 June 2010 the Council took the decision to not replace 5 care homes which had 
previously been included in future capital investment plans. 
 
The Depute Chief Executive & Director of Finance signed and authorised the 
Statement of Accounts for issue on    September 2010.  Events after the date of the 
Balance Sheet (31 March 2010) up to the date of signing have been considered in 
preparing these accounts. 
 
- 62 -

HOUSING REVENUE ACCOUNT INCOME AND EXPENDITURE ACCOUNT 
2008/09  
2009/10 
£000  
£000 £000 
 
 
 
 
 
Income 
 
 
(40,211) 
Dwelling rents (gross) 
(41,458)   
(1,562) 
Non-dwelling rents (gross) 
(1,577)   
(1,817) Other 
income 
(2,424) 
 
(43,590)  
 
(45,459) 
 
 
 
 
 
Expenditure 
 
 
15,093 
Repairs and maintenance 
15,770   
8,884 
Supervision and management 
8,606   
8,031 
Depreciation and impairment of fixed assets 
6,744   
1,985 Other 
costs 
1,720 
 
33,993  
 
32,840
 
 
 
 
Net income from HRA services as per Council 
(9,597) 
Income and Expenditure Account 
 (12,619)
 
 
 
 
296 
HRA share of corporate and democratic core  
313   
114 
HRA share of non-distributed costs 
86   
410  
 
399
 
 
 
 
(9,187) 
Net income from HRA services 
 (12,220)
 
 
 
 
 
 
 
 
(168) 
Gain on disposal of fixed assets 
(238)   
7,444 
Interest payable and similar charges 
6,524   
(488) 
Amortisation of premiums and discounts 
(457)   
(218) 
Interest and investment income 
(30)   
Pension interest cost and expected return on 
134 
pension assets 
508   
6,704  
 
6,307
 
 
 
 
(2,483) 
Surplus for the year on HRA services 
 
(5,913)
 
 
 
- 63 -

STATEMENT OF MOVEMENT ON THE HOUSING REVENUE ACCOUNT BALANCE FOR 
THE YEAR ENDED 31 MARCH 2010 
(2,483)  Surplus for the year on HRA services 
 
(5,913) 
 
 
 
 
Additional amounts required by statute or non-
statutory proper practice to be taken into 
account in determining the increase or 
decrease in the Housing Revenue Account 

 
balance 
 
 
 
 
 
 
Difference between any item of income and 
expenditure determined in accordance with the 
SORP and determined in accordance with 
   statutory requirements or non-statutory proper 
150   practice 1,133 
 
 
 
 
 
168  Gain on sale of HRA fixed assets 
238   
 
 
 
 
(8,031)  Depreciation and impairment of fixed assets 
(6,744)   
 
 
 
 
Amount by which finance costs calculated in 
accordance with the SORP differ from the amount 
calculated in accordance with statutory 
488  requirements  
457  
 
 
 
 
Government grants and capital contributions 
594  amortised matching depreciation and impairments 
2,203   
 
 
 
 
2,203  Capital expenditure funded by the HRA 
2,340   
 
 
 
 
FRS 17 Pension costs different from contributions 
(20)  due under pension scheme regulations 
(122)   
 
 
 
 
6,931  Statutory provision for repayment of debt 
6,408   
(2,543)  
 
5,913 

Movement in the HRA balance 
 

 
 
 
 
8,804  HRA balance at 1 April 2009 
 
8,804 
 
 
 
 
8,804  HRA balance at 31 March 2010 
 
8,804 
 
- 64 -

NOTES TO THE HOUSING REVENUE ACCOUNT 
1.  Rent Arrears 
 
Rent arrears were as follows: 
 
2008/09  
2009/10
Actual  
Actual 
£000  
£000 
 
 
 
1,688 Current 
tenants 
1,604
1,874 Former 
tenants 
1,974
3,562 Total 
3,578
 
 
2.  Provision for Bad and Doubtful Debts 
 
Provision is made for bad and doubtful debts relating to rent arrears and sundry 
debtors. 
 
 
31/03/09 Movement
31/03/10 
 £000 
£000 
£000 
 
 
 
 
Provision for rent arrears 
2,711 
(134) 
2,577 
Provision for sundry debts 
304 
21 
325 
Total provision 
3,015 
113 
2,902 
 
 
3.  Housing Stock 
 
The Council’s housing stock was as follows: 
 
31/03/09 
31/03/10 
Number 
Size 
Number 
190 
  1  Apartment 
210
3,367 
  2  Apartment 
3,338
5,540 
  3  Apartment 
5,494
4,221 
  4  Apartment 
4,185
359 
  5  Apartment 
356
28 
  6  Apartment 
29

  7  Apartment 
1

  8  Apartment 
1

10  Apartment 
1
13,708 
  Total 
13,615
 
 
 
4.  Capital expenditure charged to the HRA 
 
The level of capital expenditure charged to the HRA is higher than budgeted.  This will 
free up future HRA resources.  £1.120m of this future flexibility will be used to support 
the Council’s bid for Scottish Government grant for council house building. 
 
 
- 65 -

COUNCIL TAX INCOME ACCOUNT 
 
2008/09   2009/10 
£000   £000 
 
 
 
123,718 
Gross council tax  levied and contributions in lieu 
124,015 
29 
Council tax benefits (net of Government Grants) 
75 
(15,637) 
Other discounts and reductions 
(14,638) 
(2,862) 
Provision for bad and doubtful debts 
(2,883) 
1,148 
Adjustments to previous years  
827 
 
 
 
106,396 
Net council tax income for the year 
107,396 
 
 
 
 
Net council tax income transferred to the General 
 
106,396 
Fund 
107,396 
 
 
 

NOTES TO THE COUNCIL TAX INCOME ACCOUNT 
 
 
1.  Background Information 
 
Council Tax income derives from charges raised according to the value of residential 
properties classified into eight valuation bands.  Charges are calculated by taking the 
amount of income required by the Highland Council for the forthcoming year and 
dividing this by the council tax base.  The council tax base is the total number of 
properties in each band adjusted by a proportion to convert to a band D equivalent and 
adjusted for discounts.  There were 91,424 band D equivalents in 2009/10. 
 
The charge for a band D property (£1,163 in 2009/10) is multiplied by the proportion 
specified for the particular band to give the individual amount due.  
 
Certain categories of dwelling qualify for exemptions.  Discount is also available for 
single occupation and empty properties.  A Council Tax Benefit Scheme operates for 
taxpayers on low income. 
 
2.  Statutory Background 
The Local Government Finance Act 1992 introduced the council tax with effect from 1 
April 1993.  From that date Council expenditure, after deducting income from fees and 
charges, grants and non domestic rates, is met from this council tax. 
Council tax is payable on any dwelling which is not an exempt dwelling (prescribed by 
an order made by the Secretary of State).  The amount of council tax payable depends 
on the valuation of the band of dwelling. 
 
3.  Provision for Bad and Doubtful Debts 
Provision has been made for bad and doubtful debts on Council Tax and Community 
Charge debt outstanding.  At 31 March 2010 the total provision is £28,746m (31 March 
2009 £27.852m).  Details of all bad debt provisions are provided in note 33 to the Core 
Statements. 
 
 
 
- 66 -

NOTES TO THE COUNCIL TAX INCOME ACCOUNT 
4.  Calculation of the Council Tax base 2009/10 
Band 
A (dbr)* 





A - E 
 
 
Number of properties 
Subtotal
Properties - 
19,982
22,886
21,779
16,947 
16,714 
98,308
Exemptions - 
(1,328)
(1,011)
(810)
(541) 
(401) 
(4,091)
Disabled relief 

(39)
(106)
(124)
(116) 
(159) 
(544)
Disabled relief 
(reduced) 39 
106
124
116
159 
75 
619
Discounts 25% 
(3) 
(2,466)
(2,378)
(1,886)
(1,145) 
(857) 
(8,735)
Discounts 50% 

(490)
(497)
(654)
(504) 
(440) 
(2,585)
Effective 
properties 36 
15,765
19,018
18,421
14,800 
14,932 
82,972
 
 
 
*A (dbr) – Band A properties with disabled band reduction 
 
 
 
 
 
 
2009/10 
 2008/09 
Band 
A - E 



A-H 
 A-H 
 Subtotal 
 
 
 
Total 
 Total 
Properties 98,308 
7,969
3,774
326
110,377   109,463
Exemptions (4,091) 
(166)
(81)
(26)
(4,364)   (4,586)
Disabled relief 
(544) 
(75)
(32)
(1)
(652)   (652)
Disabled relief 
(reduced) 619 
32
1
-
652   652
Discounts 25% 
(8,735) 
(295)
(113)
(6)
(9,149)   (9,024)
Discounts 50% 
(2,585) 
(200)
(139)
(43)
(2,967)   (2,923)
Effective 
properties 82,972 
7,265
3,410
250
93,897   92,930
 
Number of properties  
 
 
2009/10 
 2008/09 
Effective 
Ratio to 
Band D 
Band 
properties 
band D 
equivalents   Number 
 
 
 
 
 
 
A dbr 
36
5/9 
20   18
A  
15,765
6/9 
10,510   10,531
B 19,018
7/9 
14,791   14,780
C 18,421
8/9 
16,374   16,218
D 14,800
9/9 
14,800   14,573
E 14,932
11/9 
18,250   17,973
F 7,266
13/9 
10,495   10,157
G 3,410
15/9 
5,683   5,491
H 251
18/9 
501   496
 
      93,899
 
91,424   90,237
Contributions in lieu 
 
 
168   167
Total  
 
91,592   90,404
Bad debt provision 3% 
 
 
(2,747)   (2,712)
Council tax base 
 
 
88,845   87,692
 
- 67 -

NOTES TO THE COUNCIL TAX INCOME ACCOUNT 
 
5.  Council Tax charges  
 
2008/09 Band 
2009/10 
£  
£ 
646.11  A  - disabled band reduction 
646.11 
775.33  A   
775.33 
904.56 B 
904.56 
1,033.78 C 
1,033.78 
1,163.00 D 
1,163.00 
1,421.44 E 
1,421.44 
1,679.89 F 
1,679.89 
1,938.33 G 
1,938.33 
2,326.00 H 
2,326.00 
 
- 68 -

NON DOMESTIC RATE INCOME ACCOUNT 
2008/09 
  
 
2009/10 
£000 
 
 
 
£000 £000 
 
 
 
 
 
102,816 
  Gross rates levied and contributions in lieu 
 
108,270 
(18,121) 
  Reliefs and other deductions 
 
(22,352) 
(131)   
Payment of Interest 
 
(85) 
(932)   
Provision for bad and doubtful debts 
 
(1,297) 
83,632 
 
 
 
 84,536
 
 
 
 
 
 
 
Adjustments for previous years 
 
 
(3,089)   
Pool years 
 
(2,241) 
17 
 
Pre pool Years 
 
13 
(3,072)   
 
 
 (2,228)
 
 
 
 
 
80,560 
 
Net non-domestic rate income 
 
 
82,308
 
 
 
 
 
 
 
 
 
 
 
 
Allocated to: 
 
 
80,998 
 
Contribution to national non-domestic rates pool 
 
 82,810
17 
 
Adjustment for pre-pool years 
 
 13
(455)   
Discretionary relief costs payable by Council 
 
 (515)
 
 
 
 
 
80,560 
 
Net non-domestic rate income 
 
 
82,308
 
 
 
 
 
 
 
 
 
 
82,591 
 
NDRI distributable amount 
 
 91,517
(455)   
Less discretionary relief costs payable by Council 
 
 (515)
17 
 
Add adjustments for previous years 
 
 13
Net transfer to General Fund 
82,153 
 
  
91,015
 
 
National Non Domestic Rates Income (NNDR) is regulated by statute.  The Scottish 
Government specifies an amount for the rate poundages as shown below, and subject 
to the effects of transitional arrangements and other reliefs, local businesses pay rates 
calculated by multiplying their rateable value by that amount.  The Council is 
responsible for collecting rates due from ratepayers in its area, but pays the proceeds 
into the NNDR pool administered by the Scottish Government.  The Scottish 
Government redistributes the sums payable back to local authorities as part of the 
overall Finance settlement.  
 
The non-domestic rate poundages per pound of rateable value were as follows:  
 
2008/09 Rateable 
Value 
2009/10 
45.8p Under 
£29,000 
48.1p 
46.2p 
Over   £29,000 
48.5p 
 
 
- 69 -

NON DOMESTIC RATE INCOME ACCOUNT 
Analysis of Rateable Values as at 1 April 2009 
 
As at 1 April 2008 
 
As at 1 April 2009 
Number 
Rateable 
 
Number of  Rateable 
of Units 
Values 
Units 
Values 
 £000 
 
 £000 
 
 
 
 
 
2,585 52,751 
Shops 
2,603  52,321 
877 
16,129 
Public houses and hotels 
885 
15,955 
1,625 22,655 
Offices 
1,652  23,257 
2,666 32,355 
Industrial 
subjects 
2,671  32,803 
 
 
Leisure, entertainment, caravans 
4,112 15,403 
3,939 
15,273 
and holiday sites 
378 
3,891 
Garages and petrol stations 
372 
3,826 
 
 
Cultural, sporting subjects, 
1,005 15,407 
1,003 
14,010 
education and training 
1,176 
10,575 
Public service subjects 
1,177 
10,713 
2,063 57,700 
Miscellaneous 
2,043  57,556 
 
 
 
 
 
16,312 225,339 
Total 
 
16,520  227,241 
 
 
 
 
- 70 -

CORPORATE GOVERNANCE ASSURANCE STATEMENT 
The Highland Council is responsible for ensuring that its business is conducted in 
accordance with the law and proper standards, and that public money is safeguarded 
and properly accounted for, and used economically, efficiently and effectively.  In 
discharging this accountability, elected members collectively and senior officers 
individually are responsible for putting in place proper arrangements for the 
governance of the Highland Council’s affairs and the stewardship of the resources at its 
disposal.  To this end, the Council has approved and adopted a Local Code of 
Corporate Governance, which is consistent with the principles and reflects the 
requirements of the CIPFA/SOLACE Framework Note for Scottish Authorities – 
Delivering Good Governance in Local Government (2007).  
 
A copy of the code may be obtained from the Chief Executive, Council HQ, 
Glenurquhart Road, Inverness, IV3 5NX. 
 
The Local Code details how the Council will apply the fundamental principles of 
Corporate Governance for public sector bodies to the following six headings: 
 
 
 
 
 
 
 
 
1.  Focusing on the purpose of the Authority and on outcomes for the community 
and creating and implementing a vision for the local area 
2.  Members and officers working together to achieve a common purpose with 
clearly defined functions and roles. 
3.  Promoting values for the Authority and demonstrating the values of good 
governance through upholding high standards of conduct and behaviour  
4.  Taking informed and transparent decisions which are subject to effective scrutiny 
and managing risk 
5.  Developing the capacity and capability of members and officers to be effective 
6.  Engaging with local people and other stakeholders to ensure robust public 
accountability 
 
The Highland Council has put in place appropriate management and reporting 
arrangements to enable it to satisfy itself that its approach to corporate governance is 
adequate and effective in practice.  The Assistant Chief Executive has been given 
responsibility for: 
 
•  overseeing the implementation of the Local Code of Corporate Governance and 
monitoring its operation 
•  reviewing the operation of the Local Code of Corporate Governance in practice 
•  reporting annually to the Council on compliance with the Local Code and any 
changes required to maintain it and ensure its effectiveness. 
 
In fulfilling these duties, the Assistant Chief Executive has taken into account the 
results of reviews of internal control that have been carried out within each Council 
Service. 
 
In addition, The Highland Council’s Depute Chief Executive & Director of Finance, 
through the Head of Internal Audit and Risk Management, has been given the 
responsibility to review independently and report to the Audit and Scrutiny Committee 
annually on the adequacy and effectiveness of the Local Code and the extent of 
compliance with it. 
  
 
 
 
 
 
- 71 -

CORPORATE GOVERNANCE ASSURANCE STATEMENT 
The Head of Internal Audit and Risk Management’s responsibilities in this regard were 
discharged through the presentation of the Internal Audit Annual Report to the Audit 
and Scrutiny Committee on 19 August 2010. 
 
To ensure proper Council scrutiny, the Council considered a report by the Assistant 
Chief Executive on progress with the 2009/10 Local Code of Corporate Governance on 
23 June 2010 and set objectives for the financial year 2010/11.   
 
On the basis of the reports by the Assistant Chief Executive and the Head of Internal 
Audit and Risk Management we are satisfied that the Council’s governance 
arrangements are operating effectively.  However it is accepted that the Council must 
strive for continuous improvement in performance and it is proposed over the coming 
year to take steps to address the following matters to further enhance our corporate 
governance arrangements:- 
 
1.  Complete outstanding issues which were identified in the Local Code of 
Corporate Governance for 2009/10 including completing a review of Council’s 
Whistle Blowing Policy and delivering Community Planning Briefings for 
Members. 
 
2.  Complete the review of the Employee Code of Conduct, a draft of which is 
currently out for consultation.  A Proposed new Code will be presented to 
Resources Committee on 5 October 2010. 
 
3. 
A recruitment strategy to continue to develop on-line recruitment has been put in 
place and will be further developed within the Corporate Improvement 
Programme. 
 
4. 
A review of Health and Safety structures within the Council has been completed 
and will be reported to Resources Committee on 5 October 2010.  Phase 1 will 
be completed by December 2010. 
 
5.  Take forward as planned those matters arising from the Assistant Chief 
Executive’s report, submitted to the Council on 23 June 2010 relating to 
progress made in implementing the Code during 2009/10 and the suggested 
themes to be covered in 2010/11.  Key areas of work include delivery of the 
Corporate Improvement Programme to achieve efficiency and service 
improvement; delivery of the Improvement Plan arising from the Best Value 2 
Audit of the Council and the roll out of the Public Service Improvement 
Framework; continuing the roll out of Personal Development Plans for Members 
and for all staff; implementing the revised Councillors’ Code of Conduct; 
continuing the implementation of new terms and conditions for employees; 
completing the appeals process for job evaluation; fully implementing the 
Leadership Development Programme; extending web casting and video 
conferencing of meetings; improving the occupational health service; 
strengthening the corporate approach to achieving value for money and 
demonstrating competitiveness of services and publishing a new Single 
Equality Scheme. 
 
6. 
Ensuring the full implementation of the three grade one actions highlighted in 
Internal Audit reports issued during 2009/10 relating to the processes for 
recruiting and paying new staff (the agreed management actions have now 
been completed). 
 
- 72 -

CORPORATE GOVERNANCE ASSURANCE STATEMENT 
 
7. 
Following the internal review of the Council’s support for Caithness Heat and 
Power Ltd, fully implement the action plan agreed by the Council which includes 
strengthening the Council’s governance arrangements including project 
management; scrutiny and risk management; training for Company Directors; 
including governance as part of the Management Development Programme;  
reviewing the risk management strategy and undertaking formal gateway 
reviews on large projects. 
 
We are satisfied that these steps will address the need for improvements that have been 
identified and we will monitor their implementation and operation as part of our next 
annual review. 
 
 
 
 
 
 
A S Park 
Convenor                 
 
 
 
 
 
 
A Dodds 
Chief Executive   
 
 
 
On behalf of the members and senior officers of the Highland Council. 
 
 
- 73 -

PENSION FUND ACCOUNTS 
1.   
Explanatory Foreword 
 
Highland Council is the administering authority for the Pension Fund which provides 
pensions for those employees of the Council, Comhairle Nan Eilean Siar and of other 
scheduled and admitted bodies which are eligible to join it. 
 
The Fund is constituted under legislation governing the Local Government 
Superannuation Scheme, the primary Act of governance is the Superannuation Act 1972.  
Detailed regulations for the Scheme are contained in the Local Government Pension 
Scheme (Scotland) Regulations 1998. 
 
The Fund is a separate entity from the Highland Council and its Accounts are not 
included in the Council’s Core Statements. The Fund is built up by contributions from 
both employees and employing bodies, together with interest and dividends from 
investments, out of which defined pensions and other benefits are paid. The Fund's 
assets are managed by appointed Investment Fund Managers.  Once the cost of current 
benefits is met all surplus cash income is invested to meet future liabilities to employees 
within the Fund and deferred pension benefits. 
 
Employees’ contributions to the Fund are fixed by statute and contributions payable by 
employing bodies are fixed every three years following a report by an independent 
actuary who determines the level of contribution necessary to ensure that the Fund will 
be able to meet future benefits. An employer's contribution rate of 275% of employees' 
contributions was set by the Actuary for the period 1 April 2009 to 31 March 2010. 
2. Actuarial 
Position 
In accordance with Regulation 4(2)(b) of the Local Government Pension Scheme 
(Benefits, Membership and Contributions) (Scotland) Regulations 2008 and with effect 
from 1 April 2009 a five tier contribution rate structure delivering an average employee 
contribution rate of 6.3% was introduced.  Employers' contributions are assessed every 
three years by an independent actuary and expressed as a percentage of employees' 
contribution rates. 
 
The latest actuarial valuation was carried out as at 31 March 2008, in accordance with 
Regulation 76 of the Local Government Pension Scheme Regulations (Scotland) 1998 
("The Regulations"). The principal employers’ contribution rates expressed as a 
percentage of employees’ contribution rates of 275% for 2009/10, 290% for 2010/11 and 
290% for 2011/12 were set using the “Projected Unit Method” by the Fund’s Actuaries 
during the Valuation Process at 31 March 2008. 
 
Demographic assumptions are used to estimate the future experience in the Fund. They 
take account of expected future trends (for instance future improvements in life 
expectancy) as well as past experience in the Fund. 
 
Financial assumptions are used to estimate the amount of benefits and contributions 
payable and to place a current value on these benefits and contributions. The key 
financial assumptions are: 
 
 Nominal 
 
Real 
 p.a. 
 p.a. 
Investment Return/Discount 
6.9% 3.1% 
Rate 
Pay Increase 
5.2% 
1.5% 
Price Inflation/Pension Increase 
3.7% 
0.0% 
 
- 74 -

PENSION FUND ACCOUNTS 
The actuarial projection of the Market Value of the Fund’s assets as at 31 March 2008 
was £817m. The actuarial value represented 98% of the Fund’s accrued liabilities. The 
funding level has increased from 92% in March 2005. This is largely due to investment 
returns achieved by the Fund being greater than were assessed at the previous 
valuation. However an increase in the cost of ongoing accrual benefits, plus allowances 
for mortality improvements and the introduction of a new scheme in 2009 has had a 
negative effect on the funding level. 
 
FUND ACCOUNT FOR THE YEAR ENDED 31 MARCH 2010 
 
2008/09 
 Notes 
2009/10 
 
£000  
 
£000 
 
Dealings with members, employers and others 
 
 
directly involved in the scheme 
 
 
 
 
 Contributions 
 

 
31,715 From 
employers 
 
34,546 
10,753 From 
members 
 
12,376 
42,468  

46,922 
4,603 Transfers 
in 
17 
4,486 
47,071  
 
51,408 
   
 
 
 Benefits 
 

 
(22,061) Pensions  
 
(24,057) 
(6,291)  Lump sum retirement benefits 
 
(7,557) 
(518)  Lump sum death benefits 
 
(847) 
(28,870)  
 
(32,461) 
   
 
 
  Payments to and on account of leavers 
 
 
(216) Refunds of contributions 
 
(208) 
(1,632) Transfers out 
17 
(2,284) 
(1,848)  
 
(2,492) 
(694) Administrative expenses 

(702) 
15,659  Net additions (withdrawals) from dealings with members 
 
15,753 
 
 
 
 
 
 
  Returns on Investments 
 
 
21,315 Investment 
income 
15 
19,454 
(208,788)  Change in market value of investments (realised and 
 226,550 
unrealised) 
(367)  Taxation (irrecoverable withholding tax) 
 
(342) 
(1,754)  Investment  management expenses 

(2,241) 
(189,594)  Net returns/(loss) on investments 
 
243,421 
   
 
 
   
 
 
(173,935)  Net increase (decrease) in fund during the year 
 
259,174 
   
 
 
801,707  Opening net assets of scheme 
 
627,772 
 
   
 
 
627,772  Closing net assets of the scheme  
 
886,946 
   
 
 
 
- 75 -

PENSION FUND ACCOUNTS 
NET ASSETS STATEMENT AS AT 31 MARCH 2010 
 
As at  
 Notes 
As at 
31/03/09 
31/03/10 
£000  
  £000 
 Investment 
assets 

 
309,987 Equities 
 
476,508 
122,799  Unitised insurance policies 
 
173,856 
67,347  Unit trusts – (property) 
 
81,018 
108,328  Unit trusts – (other) 
 
141,929 
282 Equity 
futures 
19 
15 
51 Currency 
forwards 
19 

11,241 Cash 
deposits 
 
11,002 
1,850  Other investment balances 
 
(332) 
621,885  
 
883,996 
 Investment 
liabilities 
 
 
(282) Equity 
futures 
19 
(15) 
(17) Currency 
forwards 
19 
(13) 
   
 
 
621,586 NET 
INVESTMENT 
ASSETS 
 
883,968 
   
 
 
 Current 
assets 
 
 
1,055 Sundry 
debtors 
 
1,226 
5,560  Deposits with Council’s Loans Fund 
 
2,795 
6,615  
 
4,021 
   
 
 
  Less current liabilities 
 
 
(429) Sundry creditors 
 
(1,043) 
 
 
 
6,186 Net 
current 
assets 
 
2,978 
627,772 NET 
ASSETS 
 
886,946 
 
 
 
- 76 -

PENSION FUND ACCOUNTS 
NOTES TO THE PENSION FUND ACCOUNTS 
 
Statement of Recommended Practice (SORP) 
 
The Pension Fund Accounts have been prepared in accordance with the Code of 
Practice on Local Authority Accounting in the United Kingdom 2009: A Statement of 
Recommended Practice (the SORP).  The Accounts have been prepared on an accruals 
basis and do not take account of liabilities to pay pensions and other benefits after the 
year end.  However, the actuarial position does account for such obligations. This is 
disclosed in the Accounts and should be read in conjunction with the Actuary's report. 
 
1. Special and Additional contributions receivable 
 
Special contributions from employers totalling £1.094m to meet the strain on the Fund 
caused by early retirement are included under Contributions Receivable. 
 
Employers contributions include £3.917m in respect of deficit funding which is spread 
over a period of 20 years. 
2. 
Contributions Receivable and Benefits Payable  
 
2008/09  
2009/10 
Contributions 
Benefits 
 Contributions 
Benefits 
Receivable  
Payable 
Receivable 
Payable 
£000 £000 
 £000 
£000 
 
28,487 21,434 
Highland 
Council 
31,888 
23,986 
11,297 6,402 
Scheduled 
Bodies 
11,845 
7,221 
2,684 1,034 
Admitted 
Bodies 
3,189 
1,254 
42,468 28,870 
Total 
46,922 
32,461 
 
3. 
Number of Contributors and Pensioners 
2008/09   2009/10 
 
 
Deferred 
 
 
 
Deferred 
Contributors  Pensioners  Pensioners
Contributors Pensioners  Pensioners
 
9,000 4,514 5,394 
Highland 
Council 8,620 4,703  5,877 
2,695 1,167 1,292 
Scheduled 
Bodies
2,875 1,214  1,354 
522 172 328 
Admitted 
Bodies  618 190  367 
12,217 5,853 7,014 
Total 
12,113 6,107  7,598 
 
 
- 77 -

PENSION FUND ACCOUNTS 
4. Administration 
Costs 
 
2008/09  
2009/10 
£000  
£000 
 Investment 
Management 
Services 
 
23 Actuarial 
Fees 
15 
119 
Custodial Fees & Performance 
165 
 
Measurement 
1,548 Manager 
Fees 
1,979 
36 Investment 
Advisory 
Fees 
20 
28 General 
Fees 
62 
1,754  
2,241 
 
 
 
 Internal 
Administration 
 
 
692 Highland 
Council 
Recharge 
700 
2 Other 
Administration 

694  
702 
2,448 Total 
2,943 
 
5. Valuation 
of 
Investments 
The Fund's investments which are listed on recognised Stock Exchanges are valued on 
the basis of market convention at Bid market price with the exception of Unit Trusts 
managed by Fidelity which continue to be valued at Middle market price. Derivatives are 
valued at Fair Value. Where representative prices are unavailable, investments are 
valued on the most appropriate basis in the opinion of the Custodian. 
 
Assets and liabilities in foreign currency are translated into sterling at the closing rates of 
exchange on the last working day of the financial year. 
 
- 78 -

PENSION FUND ACCOUNTS 
5. 
Valuation of Investments (continued) 
 
Classifications  
 
 
Change in 
 
Market Value  Purchases at 
Sales 
Market Value
Market Value 
at 1 April 09 
Cost 
Proceeds 
at  
31 March 10 
Investment 
Assets  £000 £000 £000 £000  £000 
 
Equities 309,987 
160,564 
(143,849) 
149,806 
476,508 
Unitised Insurance 
122,799 16,293 
(14,093) 48,857 
173,856 
Policies 
Unit Trusts (Property) 
67,347 
24,787 
(14,950) 
3,834 
81,018 
Unit Trusts (Other) 
108,328 
8,417 
(396) 
25,580 
141,929 
Equity Futures 
282 
 
 
(267) 
15 
Currency Forwards 
51 
 
 
(51) 
 
 608,794 
210,061 
(173,288) 
227,759 
873,326 
Cash Deposits 
11,241 
 
 
(239) 
11,002 
Other Investment 
1,850  
 
(2,182) 
(332) 
Balances 
Total 
621,885 
    210,061 
(173,288) 
225,338 
883,996 
 
 
 
 
 
Investment Liabilities 
 
 
 
267 
(15) 
Equity Futures Offsets 
(282) 
 
 

(13) 
Currency Forwards 
(17) 
 
 
 
 
Net Total 
621,586 
   210,061 
(173,288) 
225,609 
883,968 
Net Purchases 
 
36,773
 
 
 
 
 
 
 
 
The change in market value of investments during the year comprises all increases and 
decreases in the market value of investments held at any time during the year, including profits 
and losses realised on sales of investments during the year. 
 
Transaction Costs are included in the cost of purchases and sale proceeds. Transaction costs 
include costs charged directly to the Fund such as fees, commissions stamp duty and other fees. 
Transaction costs incurred during the year amounted to £0.5m (£0.6m 2008/09). In addition to the 
transaction costs disclosed above, indirect costs are incurred through the bid-offer spread on 
investments within pooled investment vehicles. The amount of indirect costs is not separately 
provided to the Fund. 
6. 
Performance of the Fund 
In the year to 31 March 2010 the Fund’s return on investments was 39.02% against the 
customised benchmark of 36.35%. 
 
Key Contributors to the year’s out performance were favourable returns for overseas equities 
(portfolio v benchmark 47.17%) reflecting a rally in global equity markets from previous falls and 
fixed income investments – corporate bonds. These offset the Fund’s weak returns from UK 
equities and property investments. 
 
- 79 -

PENSION FUND ACCOUNTS 
7. Custodial 
Arrangements 
 
All assets are held according to market practice by the Fund’s Custodian Northern Trust. Where 
held by one of Northern Trust’s sub-custodians, they are held in an omnibus account unless 
market regulations dictate otherwise. These assets are clearly identified in Northern Trust’s 
records as being those of the Highland Council Pension Fund. 
 
The Custodians produce an annual report on their internal controls which is examined by KPMG 
LLP in accordance with the American Institute of Certified Public Accountants Statement on 
Auditing Standards (No 70) SAS70 – Report on the Processing of Transactions by Service 
Organisations. KPMG LLP approved the most recent report on 30 September 2009. 
8. 
Tax Status of the Scheme 
The Highland Council Pension Fund qualifies as an Inland Revenue 'exempt approved scheme'. 
9. Funds 
under 
Management 
2008/09 Manager 
Analysis 
2009/10 
Market Value  % of Total   Market 
Value 
% of Total 
£000 
Fund 
£000 
Fund 
 
 
 
 
 
148,051 
23.8  Alliance Bernstein – Global Equity 
225,643 
25.5 
189,030 
30.3  Baillie Gifford – Global Equity 
288,981 
32.6 
93,549 
15.1 Fidelity – Bond Fund (see analysis 
114,165 13.0 
below) 
122,799 
19.8  Legal and General – Managed Fund 
173,855 
19.7 
68,157 
11.0  Schroders – Property Fund 
81,324 
9.2 
     621,586 
100.0  Combined Fund 
883,968 
100.0 
 
 
 
 
 
 
 
 
 
 
 
 
2008/09 
Portfolio Distribution – (UK/Overseas) 
2009/10 
UK Overseas 
 
UK  Overseas 
£000 £000 
 
£000 £000 
Investment Assets 
 
 
113,878 
196,109  Equities 
           175,670
300,838 
122,798 - 
Unitised 
Insurance 
Policies 
173,856

65,421 
1,929 
Unit Trusts (Property) 
81,018

83,996 
24,331 
Unit Trusts (Other)  
105,784
36,145 
- 282 
Equity 
Futures 
-
15 
- 51 
Currency 
Forwards 
-

7,903 3,338 
Cash 
Deposits 
7,967
3,035 
1,850 

Other Investment Balances 
(332)

395,845 226,040 
Total 
543,963
340,033 
  
Investment 
Liabilities 
 

(282) 
Equity Future Offsets 
-
(15) 
- (17) 
Currency 
Forwards 
-
(13) 
395,845 225,741 
Net 
Total 
543,963
340,005 
 
 
- 80 -

PENSION FUND ACCOUNTS 
9. 
Funds under Management (continued) 
2008/09 
Portfolio Distribution – 
2009/10 
(Quoted/Unquoted) 
Quoted Unquoted 
 
Quoted 
Unquoted 
£000 £000 
 
£000 
£000 
 Investment 
Assets 
 
309,985 

Equities 
476,508 
                 - 
122,797 

Unitised Insurance Policies 
173,856 
                 - 
67,350 

Unit Trusts (Property) 
81,018 
                 - 
108,329 

Unit Trusts (Other)  
141,929 
                 - 
282 
 
Equity Futures 

                 - 

51 
Currency Forwards 
15 
                 - 
- 11,241 
Cash 
Deposits 

11,002 
1,850 

Other Investment Balances 
(332) 

610,593 11,292 
Total 
872,994 
11,002 
  
Investment 
Liabilities 
 
 
(282) 

Equity Futures Offsets 
(15) 

- (17) 
Currency 
Forwards 

(13) 
610,311 11,275 
Net 
Total 
872,979 
10,989 
 
The following is an analysis of the investments managed by Fidelity which form part of ‘Unit Trusts 
(Other)’. 
 
2008/09 Fidelity 
Investments 
2009/10 
UK Overseas 
 
UK 
Overseas 
£000 £000 
 
£000 
£000 
 
   
 
 


Fixed Interest (Public Sector) 




Fixed Interest (Other) 


- - 
Index 
Linked 
Securities 


32,191 - 
UK 
Gilts 
30,516 

33,828 

UK Corporate Bonds 
44,439 

- 24,331 
Overseas 
Fixed 
Interest 

36,145 
3,199  
Cash 
Fund 
3,064 

69,218 24,331 
Total 
78,020 
36,145 
 
10. 
Statement of Investment Principles and Funding Strategy Statement 
The Local Government Pension Scheme (Management and Investment of Funds) (Scotland) 
Amendment Regulations 1999 places a requirement on the administering authorities of the 
Local Government Pension Scheme (LGPS) to prepare, maintain and publish a Statement of 
Investment Principles. The Statement is published and available at 
www.highland.gov.uk/yourcouncil/finance/pensions/local-government-pension-scheme
 
A Funding Strategy Statement, which summarises the Fund’s approach to funding liabilities, 
has been prepared in accordance with Regulation 75A(1) of the Local Government Pension 
Scheme (Scotland) Regulations 1998 (the Regulations) as amended by the Local 
Government Pension Scheme (Scotland) Amendment Regulations 2005. The Statement 
describes the strategy of the Highland Council acting in its capacity as Administering 
Authority for the funding of the Highland Council Pension Fund. The Statement is published 
and available at www.highland.gov.uk/yourcouncil/finance/pensions/local-government-
pension-scheme

 
- 81 -

PENSION FUND ACCOUNTS 
11. 
Contingent liabilities and Post Balance Sheet Events 
There are no contingent liabilities or post balance sheet events. 
 
12. Stock 
Lending 
As at 31 March 2010, no stock was released to a third party under a securities lending 
agreement. 
 
13. 
Scheduled and Admitted Bodies as at 31 March 2010 
Administering Authority  
Highland Council (also Scheduled Body) 
 
 
 
Scheduled Bodies  
 
Comhairle Nan Eilean Siar  
Lews Castle College 
Highland and Western Isles Valuation  Northern Joint Police Board 
Joint Board 
Scottish Police Service Authority 
Highlands & Islands Fire Board 
The Highland Council 
Highlands of Scotland Tourist Board 
The North Highland College 
HITRANS 
Western Isles Tourist Board 
Inverness College 
 
 
 
Admitted Bodies 
 
Bord Na Gaidhlig 
Inverness Harbour Trust 
Caledonia Community Leisure Ltd 
Morrison FM 
Cromarty Firth Port Authority 
Richard Irvin & Sons 
Eden Court Theatre 
Skills Development Scotland 
Hebridean Housing Partnership 
Stornoway Port Authority 
Highland Blindcraft  
Torvean Golf Club 
Highland & Islands Enterprise (HIE) 
University of the Highlands and Islands 
Highlands and Islands (Scotland) 
Vacman Limited 
Structural Funds Partnership 
Visual Impairment Services Highland  
Highland Opportunity Ltd 
William Munro Construction Ltd 
 
 
 
 
 
 
14. 

Additional Voluntary Contributions (AVC’s) 
 
The AVC facility is provided by the Prudential Assurance Company Limited and is a 
money purchase arrangement where members have the choice to invest in a range of 
low, medium and high risk investment funds. In accordance with regulation 5 [2] [C] of 
the Pension Scheme (Management and Investment of Funds) Regulations 1998 [S1 
1998 No. 1831]. These figures do not form part of the accounts of the Pension Fund and 
are stated for information only. 
 
 
 
 
 
 
- 82 -

PENSION FUND ACCOUNTS 
2008/09 
 2009/10 
£000 
£000 
8,739 Opening 
Value 
8,936
993 Contributions 
Invested 
1,161
346 
Interest, Bonuses & Transfers 
445
(1,142) 
Sale of Investments 
(1,126)
8,936 Closing 
Value 
9,416
 
15. Income 

Analysis 
 
 
 
 
Combined Fund 
Combined Fund 
as at 31/03/09 
as at 31/03/10 
£000  
£000 
12,427 
  Dividend from Equities 
10,958 
8,496 
Income from pooled investments 
8,712 
434 
Interest on cash deposits 
37 
475 Other 
Investments 
464 
(518) Investment 
Expenses 
(717) 
21,314  
19,454 
 
16. Tax 
Claim 
 
During 2006/07 The Highland Council joined a group litigation to recover tax credits on 
overseas dividends and foreign income dividends. The estimated claim, gross of fees is 
£1.7m. 
 
During 2009/10 KPMG were contracted to submit ‘EU Fokus Bank’ claims for recovery of 
withholding tax with an estimated value of £1.3m gross of fees. In March 2010 £0.1m 
was received in full settlement of the Dutch Withholding tax claim. 
 
 
17. Transfer 
Values 
 
During 2009/10 there were no significant bulk or individual transfers in or out of the Fund. 
 
 
18. 
Analysis of Employers’ Pension Contributions 
 
 Highland 
Other 
Admitted 
Totals 
Council 
Scheduled 
Bodies 
Bodies 
 
£000 £000 £000 
£000 
Employers 
     
Normal Contribution (Future Service) 
21,936
8,120
2,061 
32,117
Deficit Funding (Past Service) 
828
365
142 
1,335
 22,764
8,485
2,203 
33,452
 
 
Strain on Fund 
776
230
88 
1,094
 23,540
8,715
2,291 
34,546
 
 
 
- 83 -

PENSION FUND ACCOUNTS 
19. 
Derivatives -  Summary of Contracts at 31 March 2010 
 
Derivative Currency 
Fair 
Value 
 £000 
£000 
Equity Futures 
 
 
Fut Jun 10 EMINI S&P 500 
GBP
15 
 
 
Forward Currency Contracts 
 
FX Deal Transacted 31/03/2010 
USD v GBP
(2) 
FX Deal Transacted 30/03/2010 
EUR v GBP
(3) 
FX Deal Transacted 30/03/2010 
USD v GBP
(7) 
 
 
 
 
Investment Manager Alliance Bernstein holds stock index (equity) futures and short 
currency forwards for the Fund. The stock index futures are exchange traded ensuring 
effective cash exposure does not breach 10% of the portfolio managed by them. They 
target 0.5% cash weight in the portfolio thereby keeping a high exposure to equity 
markets. The sale of currency forwards, traded over the counter (OTC), is undertaken in 
order to hedge foreign currency exposure risk back to the portfolio’s base currency of 
GBP. 
 
 
 
- 84 -

COMMON GOOD FUNDS 
FOREWORD 
Highland Council administers the Common Good Funds of the former Burgh Councils 
of Inverness, Nairn and Ross & Cromarty.  The funds are held for the benefit of the 
residents of those former burghs and must be used in the first instance to maintain the 
assets of the Common Good.  Thereafter funds can be used for a purpose which is in 
the interests of the community for which the Common Good Fund was established. 
 
Accounting Policy 
 
LAASAC guidance suggests that FRS 15 “Tangible fixed Assets” (and not capital 
accounting) should be applied when accounting for the assets of a common good fund. 
 
Common good properties are investment properties and therefore are not covered by 
FRS 15. Consequently they are held on the Balance sheet as such and revalued 
regularly  to reflect their up to date value as investments. 
 
Plant and equipment is depreciated over five years on a straight line basis. 
 
 
COMMON GOOD FUNDS 
INCOME AND EXPENDITURE ACCOUNT 
FOR THE YEAR ENDED 31 MARCH 2010 
 
 
2008/09  
2009/10 
£000  
£000 
 
 
 
2,119 Income 
2,164 
(1,809) Expenditure 
(2,758) 
(18) Depreciation 
 
(71) 
292 
(Deficit)/surplus for the year 
(665) 
 
 
- 85 -

COMMON GOOD FUNDS 
BALANCE SHEET 
AS AT 31 MARCH 2010 
 
31 March 
 Notes 
31 
March 
2009 
2010 
Restated 
£000   
£000 
 
Fixed Assets 

35,812 Investment 
Properties 
 
35,832 
71 
Vehicles, plant and equipment 
 

1,028 Community 
Assets 
 
1,028 
5,022 Investments 
 

5,295 
41,933  
 
42,155 
 
 
 
 
 
Current Assets  
 
 
3,191 Loans 
Fund 
deposit 

2,907 
72 Sundry 
debtors 
 
30 
3,263  
 
2,937 
 
 
 
 
 
Current Liabilities  
 
 
(502) Sundry 
creditors 
 
(769) 
 
 
 
 
2,761 
Net current assets 
 2,168 
 
 
 
 
44,694 
Net assets 
 
44,323 
 
 
 
 
 Financed 
by: 
 
 
33,370 Revaluation 
Reserve 
 
33,390 
2,936 Capital 
Funds 
 
3,156 
8,388 Revenue 
Funds 
 
7,777 
 
 
 
 
44,694 
Total Net Worth 
 
44,323 
 
 
- 86 -

COMMON GOOD FUNDS 
NOTES TO THE COMMON GOOD FUNDS ACCOUNTS  
 
1.  Fixed Assets 
 

Vehicles, 
Investment 
plant and 
Community 
 
Properties 
equipment
Assets Total 
 £000 
£000 
£000 
£000 
 
 
 
 
 
Gross book value 
 
 
 
 
As at 1 April 2009 
35,812 
89 
1,028 
36,929 
Revaluations 20 


20 
As at 31 March 2010 
35,832 
89 
1,028 
36,949 
 
 
 
 
 
 
 
 
 
 
Depreciation 
 
 
 
 
As at 1 April 2009 
-
18 

18 
Charge for year 
-
71 

71 
As at 31 March 2010 
-
89 

89 
 
 
 
 
 
 
 
 
 
 
Net book value 
 
 
 
 
As at 31 March 2010 
35,832

1,028 
36,860 
 
 
 
 
 
As at 31 March 2009 
35,812
71 
1,028 
36,911 
 
 
Robert Smail (MRICS), Property Manager, Housing and Property Services, Highland 
Council carried out the asset valuations as at 1 April 2006 in accordance with the 
Appraisal and Valuation manual of the Royal Institute of Chartered Surveyors.  The 
next valuation will take place as at 1 April 2011. 
 
Investment properties include land at Sandown belonging to Nairn Common Good 
fund.  This has been revalued downwards during 2009/10 reflecting costs already 
incurred associated with the future disposal of the land.   
 
Community assets relate to works of art and other moveables. 
 
 
- 87 -

COMMON GOOD FUNDS 
2.  Investments 
 
At 31 March 2010, the balances held, valuation of fixed assets and cost and value of 
Investments for each Common Good Fund were as follows:   
 
31 March 2009 
 
31 March 2010 
Fund 
Fixed 
Investments 
 
Fund 
Fixed 
Investments 
Balance 
Assets 
Cost     Value 
Balance  Assets 
Cost    Value 
£000 £000 
£000 
£000 
 
£000 £000 
£000 
£000 
 
 
 
 
 
 
 
9,365 20,896 
5,016 
5,348
Inverness  9,408 20,896 
5,289 
7,458
387 15,307 

6
Nairn 
38 15,307 

6
957 381  - -
Tain 
864 310  - -
224 55 - 
-
Dornoch  232 55 - 
-
165 128  - -
Dingwall  153 128  - -
144 19 - 
-
Fortrose  150 39 - 
-
33 49 - 
-
Cromarty  30 49 - 
-
49 76 - 
-
Invergordon 
58 76 - 
-
11,324 36,911 
5,022 
5,354
Total 
10,933 36,860 
5,295 
7,464
 
 
3. 

Inverness Common Good - Investments  
 
The Inverness Common Good Fund has holdings, managed by a fund manager, in 
various types of investments as detailed below:- 
 
31 March 2009 
 
 31 March 2010 
Units Held 
Units Held 
Cost Value 
 Cost 
Value 
£000 £000 
 
£000 £000 
 
 
523 
552 
United Kingdom Fixed Interest 
671 
685 
366 
394 
Other International Fixed Interest 
446 
475 
107 
127 
United Kingdom Index Linked 
107 
136 
2,709  2,532 
United Kingdom Equities 
2,860 
3,843 
329 
475 
North America Equities 
333 
678 
257 366 
Continental 
Europe 
Equities 
257 
465 
131 138 
Japan 
Equities 
131 
178 
117 
255 
Far East Equities 
121 
413 
124 
293 
Emerging Markets Equities 
112 
418 
75 
52 
United Kingdom Alternative 


135 
23 
Continental Europe Alternative  
135 
49 
20 
18 
Other International Equities 
74 
75 
123 
123 
United Kingdom Cash 
42 
43 
5,016 5,348  Total 5,289 
7,458 
 
 
 

 
- 88 -

COMMON GOOD FUNDS 
 

Reconciliation of loans fund deposit 
 
 
 
 
 
2008/09 
 
(Restated)   2009/10 
 £ 
 
£ 
 
 
 
 
2,382 
Loans fund deposit at 1 April 2009 
2,801 
 
 
 
 
(Deficit)/Surplus on Income and Expenditure Account for 
 292 
the year 
(665)
 
 
 
 
  
Non-cash 
items 
 
 18 
Depreciation 
charges 
71 
 (6) 
Decrease/(increase) 
in 
debtors 
42 
 403 
Increase 
in 
creditors 
658 
 
 
 
 
 102 
Capital 
receipts 

 
 
 
 
 
3,191 
Loans fund deposit at 31 March 2010 
2,907 
 
 
5. 

Investment in Related Company 
 
 
Tain Common Good Fund has an interest in Highland Fresh Mussels Ltd, a Company 
Limited by Guarantee which operates and manages the Tain Mussel Fishery.  The 
liability of the Common Good Fund is limited to £1. 
 
The latest available audited results of the company were as follows: 
 
Profit/(loss) 
Profit/(loss) 
before 
after 
Financial year end 
Net Assets 
taxation 
taxation 
 
£000 £000 £000 
 
 
 
 
31 March 2009 
224
(25) 
(20) 
 
 
 
 
31 March 2008 
244
(71) 
     (62) 
 
 
Company accounts are available on request from the Company Secretary, c/o 
Highland Council, Glenurquhart Road, Inverness, IV3 5NX. 
 
 
 
 
 
- 89 -

CHARITABLE, EDUCATIONAL AND OTHER TRUST FUNDS ACCOUNTS 
INCOME AND EXPENDITURE ACCOUNT 
FOR THE YEAR ENDED 31 MARCH 2010 
 
2008/09 
 2009/10 
Charitable 
Educational 
Other 
 Charitable 
Educational 
Other  
Trust 
Trust 
Trust 
Trust 
Trust 
Trust 
Funds 
Funds 
Funds 
Funds 
Funds 
Funds 
£000 £000 £000 
 £000 
£000 
£000 
 
 
 
 
 
 
 
8 126  10 
Income 

52 
329 
(5) (116)  (88) 
Expenditure 
(4) 
(62) 
(218) 
3 10 (78) 
Surplus for the year 
(1) 
(10) 
111 
 
 
 
BALANCE SHEET AS AT 31 MARCH 2010 
 
31 March 2009 
 
31 March 2010 
Charitable 
Educational 
Other  
 Charitable 
Educational 
Other  
Trust 
Trust 
Trust 
Trust 
Trust 
Trust 
Funds 
Funds 
Funds 
Funds 
Funds 
Funds 
£000 £000  £000 
 £000 
£000 
£000 
 
 
 
Assets 
 
 
 
23 
172 
1,280 
Investments at cost 
23 
171 
1,108 
 
 
 
 
 
 
 
 
 
 
Current assets 
 
 
 
168 2,169  910 
Loans 
Fund 
deposit 
167 
2,203 
1,036 
  
54 
Sundry 
debtors 


39 
168 2,169  964 
 
167 
2,203 
1,074 
 
 
 
Less current liabilities 
 
 
 
- - 

Sundry 
creditors 



168 2,169  964 
Net current assets 
167 2,203 
1,074 
 
 
 
 
 
 
 
191 2,341 2,244 
Net assets 
190 
2,374 
2,182 
 
 
 
 
 
 
 
 
 
 
Financed by: 
 
 
 
 
 
 
 
 
 
 
88 1,822  848 
Capital 
Funds 
88 
1,865 
675 
103 519 
1,396 
Revenue 
Funds 
102 
509 
1,507 
191 2,341 2,244 
Total Funds  
190 
2,374 
2,182 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
- 90 -

CHARITABLE, EDUCATIONAL AND OTHER TRUST FUNDS ACCOUNTS 
1. Charitable 
Trusts 
The Council administers eighty registered Scottish Charities which are for the benefit of 
various specific causes.  At 31 March 2010 the balances and investments held are as 
follows: 
 
31 March 2009 
 
 
31 March 2010 
Scottish 
Fund 
Investments  Charity 
Fund 
Investments 
Balance 
at cost 
No Charity 
Balance 
at cost 
£ £   
 
£  £ 


1768 
Beatrice Oilfield Trust - Nairn 

-
John Rutherford Trust for Poor of 
- -  3192 
Kildonan 
- -
John Robert Campbell Bequest for 
- -  4447 
the Poor of Parish of Lairg 
- -
Miss E Kemp bequest for Poor of 
513 500  4881 
Rosemarkie 507 
500
876 
155 
5071 
Grantown War Memorial Fund 
870 
155
West Coast of Ross-Shire 
8,775 -  7158 
(Mainland) Distress Fund 
8,417 
-
John Martin Trust to give Christmas 
121 101  8916 
dinner to the poor of Invergordon 
116 
101
McCulloch Bequest for the Poor of 
77 -  8950 
Durness 
76 -
John Couper Bequest for Poor of 
753 -  9516 
Helmsdale 
729 -
572 

10505 
Miss Margaret A Ross Charity Fund 

-
659 39  10813 
Coull 
Mortification 
653 
39


11444 
James Asher's Charitable Trust 

-
William Murray Morgan Caithness 
- -  12300 
Village Amenities Fund 

-
Donald Cameron of Erracht Bequest 
4,379 944  12410 
for Poor of Kilmallie 
4,394 
944
2,315 

12475 
John Rose Troup Charitable Trust 
2,240 
-
Grigor Bequest for Confirmed 
622 -  12682 
Invalids 608 
-
Duncan Cameron Trust for Poor of 
2,322 717  13277 
Abernethy 
2,331 717
Grigor Bequest for Poor of Parish of 
2,843 -  16232 
Cawdor 
2,765 -


16326 
Miss Margaret A MacLeod Bequest 

-


16486 
Hugh Wilson Trust 

-
17,179 

17126 
Highland Heart Fund 
17,073 
-
Miss Magdalene Duff Fraser 
- -  18287 
Mortification - 
-
Jonathan Anderson Mortification for 
- -  18296 
Poor - 
-
593 
589 
18297 
Frederick Klein Mortification 
583 
589


18298 
Robert Fraser Mortification 

-


18299 
Thomas Fraser Mortification 

-


18300 
Evan Baillie Mortification 

-


18301 
John Burnett Mortification 

-


18302 
Mrs Isabella Gollan Mortification 

 
- 91 -

CHARITABLE, EDUCATIONAL AND OTHER TRUST FUNDS ACCOUNTS 
31 March 2009 
 
 
31 March 2010 
Scottish 
Fund 
Investments 
Charity 
Fund 
Investments 
Balance 
at cost 
No Charity 
Balance 
at cost 
£ £   
 
£  £ 


18303  Mrs Martha Gibson Mortification 

-


18305  Robert Smith Mortification 

-
512 
505 
18306  Mrs Jane Masson Bequest 
507 
505


18307  Dr John Mackintosh Bequest 



18308  William Macgregor Bequest 

-
1,008 
1,009 
18309  F W Grant Bequest 
997 
1,009


18310  William Galloway Macdonald Bequest 

-


18311  George Melvin Bequest 

-


18312  Louis Ormond Fyvie Bequest 

-


18313  George Wilson Barron Bequest 

-
867 

18723  William Davidson Bequest 
862 
-
Miss Adeleine Florence Henderson 
2,736 1,493 
18724 
Bequests 2,735 
1,493
William Murray Bequest for Poor of 
1,056 800 
18725 
Wick 1,074 
800
William Murray Bequest for Wick 
14,798 283 
18726 
Library 14,715 
283
820 
442 
18727  Murray (Olrig) Bequest 
835 
442
378 
359 
18728  Oswald (Dunnet) Bequest 
386 
359
1,104 
1,050 
18729  Davidson - Cumming Bequest 
1,103 
1,050
221 
105 
18730  Oswald (Bower) Mortification 
223 
105
9,176 
2,834 
18731  Alexander Wares Bequest for Poor 
9,152 
2,834
13,476 
2,350 
18732  George Swanson Trust 
13,406 
2,350
1,499 
503 
18733  James Cormack Bequest 
1,505 
503
809 

18734  John Sutherland Poor Cooper's Fund 
804 
-
334 
137 
18735  John Jacobus Harper Trust 
333 
137
159 

18736  Thomas L Rettie Bequest for Poor 
159 
-
53 

18737  Jane Cormack Bequest 
52 
-
John Sutherland (Fish Curer) Poor 
208 - 
18738 
Fund 207 
-
1,988 

18739  Sir Josiah H Symon Poor Fund 
1,976 
-
- - 
18740 
John 
Miller 
Bequest 
-  -
755 
300 
18995  Miss L E M Rose Bequest 
759 
300
713 
800 
18997  Nairnshire Boot Fund 
736 
800
Miss Emma M Fraser Bequest for the 
12,755 5,000 
18999 
Poor of Nairn 
12,601 
5,000
2,538 

19557  Knockie Trust Fund 
2,523 
-
239 
95 
19558  Duncan MacBean Bequest 
318 
95
651 
90 
19559  Kennedy Trust for Poor  
649 
90
308 
300 
19561  John Fraser Bequest 
304 
300
191 - 
19562 
Hugh 
Leslie 
Bequest 
190  -
138 
12 
19563  George Murray Senior Coal Fund 
129 
12
386 

19564  David Thomson Bequest for poor 
360 
-
386 

19565  Alex Thomson Bequest for poor 
360 
-
David Thomson Bequest for Ex-
241 - 
19566 
Seaforth Highlanders 
225 
-
 
 
   
 
 
- 92 -

CHARITABLE, EDUCATIONAL AND OTHER TRUST FUNDS ACCOUNTS 
31 March 2009 
 
 
31 March 2010 
Scottish 
Fund 
Investments 
Charity 
Fund 
Investments 
Balance 
at cost 
No 
Charity 
Balance 
at cost 
£ £   
 
£  £ 
109 
46 
19567 
Ronald Ross Bequest 
105 
46 
387 

19568 
D Duff Bequest 


194 

19569 
George MacLeod Bequest 
182 

295 
19 
19570 
Tain War Memorial Fund 
293 
19 
1,677 
500 
19694 
Dr Donald Grant Legacy 
1,705 
500 
461 
200 
19695 
George Harvey Trust 
465 
200 
26,042 
1,171 
19696 
Miss Margaret Charlotte Stuart Legacy 
26,415 
1,171 
Earl of Seafield Bequest for Poor in 
Inverallan and Advie Portions of 
- - 
19697 
Cromdale Parish 




25079 
Highland Council Charitable Trusts 


Gairloch High School Howard Doris 
39,060 - 
28254 
Fund 39,083 

Highland Regional Children’s Panel 
10,277 - 
28500 
20th Anniversary Trust Fund 
10,214 

191,604 23,448 
 
Total Charitable Trusts 
190,009 
23,448 
 
 
 
2. 
Educational Trust Funds  
The Council administers 47 Educational Trust funds which are for the benefit of the 
pupils educated within the various schools or specific areas. 
 
As at 31 March 2009 
 
As at 31 March 2010 
Fund 
Investments 
 
Fund       Investments 
balance 
Cost     Value 
Trust Fund 
balance     Cost  Value 
£000 £000 
£000 
 
£000 £000 
£000 
121 
29 
26  Caithness Educational Trust 
122 
29 
24
858 - - 
Duncraig 
Endowment 
832  - -
20 

2  George Kerr Bequest 
20 

2
Howard Doris fund – Plockton 
29 - - 
High School 
28 - 
-
Inverness Royal Academy 
221 45 
233 
Educational Trust 
226 
46 
301
Inverness-shire Educational 
184 52 
302 
Trust 194 
52 
348
129 

-  Manson Bequest – Keiss 
130 

-
Manson Bequest – Nairn and 
124 - - 
Ardclach 125 

-
14 

-  Miss B G Angus Executory 
14 

-
Ross & Cromarty Educational 
476 38 
527 
Trust 474 
39 
710
101 - 
60 
Sutherland 
Educational 
Trust  100  - 
13
64 

7  Other Educational Trusts 
109 

7
2,341 172 
1,157 
Total Educational Trusts 
2,374 
171  1,405
 
 
 

 
- 93 -

CHARITABLE, EDUCATIONAL AND OTHER TRUST FUNDS ACCOUNTS 
 
3. 

Other Trust Funds  
The Council administer other trust funds which are for the benefit of various specific 
causes and are administered in accordance with the terms of the individual bequests.   
 
As at 31 March 2009 
As at 31 March 2010
Fund 
Investments 
Fund 
Investments 
balance       Cost      Value 
 
balance
Cost          Value 
£000 £000 £000 
 
£000 £000 £000 
 
 
  Inverness Burial Grounds 
901 
876 
933  Fund 
872
697 1,005
 
 
  Inverness Benevolent 
322 
330 
361  Fund 
322
334 452
 
 
  Inverness 2nd Benevolent 
77 
37 
42  Fund 81
40 
53
 
 
  Social Work Amenity 
222 

-  Funds 214

-
 
 
  Inverness – Other Trust 
150 

-  Funds 149

-
 
 
  Badenoch and Strathspey 


5  Trust Funds 
7

3
 
 
 
228 
20 
20  Caithness Trust Funds 
185
20 
15
 
 
 
92 

2  Lochaber Trust Funds 
98

2
66 

3  Nairn Trust Funds 
78

2
 
 
  Ross & Cromarty Trust 
149 
11 
11  Funds 145

7
 
 
  Skye & Lochalsh Trust 


1  Funds 5

-
 
 
 
26 

-  Sutherland Trust Funds 
26

-
 
 
 
2,244 
1,282 
1,378  Total other trust funds 
2,182
1,108 
1,539
 
- 94 -

GROUP ACCOUNTS 
INTRODUCTION  
 
The Group comprises of the Highland Council; its subsidiaries (Inverness Common Good 
Fund and Nairn Common Good Fund), and its associates.  The associates are the Council’s 
share (based on the proportion of Highland Council Members) of the Northern Joint Police 
Board; the Highland & Islands Fire Board and the Highland & Western Isles Valuation Joint 
Board and the Highlands and Islands Transport Partnership.  
 
The Group Accounts have been prepared in accordance with UK GAAP. 
 
Copies of the accounts of the Highlands and Islands Fire Board, Northern Joint Police 
Board, Highlands and Western Isles Valuation Joint Board and Highlands and Islands 
Transport Partnership are available from the Depute Chief Executive & Director of Finance, 
Highland Council, Glenurquhart Road, Inverness, IV3 5NX. 
 
 
ACCOUNTING POLICIES 
 
 
The Accounting Policies used to prepare the Group Accounts are those detailed on pages 
15 to 23 except for the departures stated below. 
 
Basis of consolidation 
Entities, other than subsidiary undertakings or joint ventures, in which the group has a 
participating interest and over whose operating and financial policies the group exercises a 
significant influence are treated as associates.  In the Group Accounts, associates are 
accounted for using the equity method. 
 
The Group includes the Highland Council, its subsidiaries and associates as listed below: 
 
Subsidiaries 
Highland Council has a 100% interest in both the Inverness Common Good and Nairn 
Common Good Funds. 
 
 
Associates 
Highland Council has the percentage interests in the following associates: 
  
• 
Highland and Islands Fire Board – 66.7%  
• 
Northern Joint Police Board – 66.7%  
• 
Highland and Western Isles Valuation Joint Board – 80%  
• 
Highlands and Islands Transport Partnership – 27.3% 
 
Investment in subsidiary companies which have not been consolidated 
 
The Highland Council has investments in the following companies which have not been 
consolidated on the grounds of materiality: 
 
• 
Caithness Heat and Power Limited  
• 
Highland Opportunity Limited (HOL) 
 
 
95

GROUP INCOME AND EXPENDITURE ACCOUNT 
 
2008/09 
 2009/10 
(restated) 
Net 
 Gross 
Gross 
Net 
Expenditure 
Expenditure
Income 
Expenditure
£000 
 £000 
£000 
£000 
 
(9,597)  Council Housing (Housing Revenue Account) 
32,840 
(45,459) 
(12,619) 
26,869 
Cultural & Related Services 
37,210 
(9,146) 
28,064 
266,567 Education 
Services 
251,694 
(11,250) 
240,444 
35,605 Environmental 
Services 
46,926 
(8,615) 
38,311 
20,718 
Other Housing – Housing Services  
74,011 
(58,849) 
15,162 
7,236 
Planning & Development Services 
14,662 
(8,069) 
6,593 
36,978 
Roads & Transport Services 
47,634 
(9,527) 
38,107 
104,125 
Social Work Services 
131,872 
(26,812) 
105,060 
7,230 
Central Services to the Public 
12,237 
(9,381) 
2,856 
12,238 
Corporate and Democratic Core 
12,587 
(233) 
12,354 
3,242 
Non Distributed Costs 
5,331 

5,331 
511,211 
Net cost of General Fund services  
667,004 (187,341)  479,663 
 
 
 
 
 
(71)  Share of operating result of subsidiary 
2,610 
(1,793) 
817 
42,590 
Share of operating result of associates 
42,825 

42,825 
 
 
 
 
 
553,730 
Net cost of services 
712,439 
(189,134) 
523,305 
 
 
 
 
(826)  Gain on sale of fixed assets 
 
 
(148) 
(89) 
Surplus on trading operations 
 
 
(361) 
38,233 
Interest payable and similar charges 
 
 
37,829 
Share of interest payable and similar  
 
 
1,140  charges of associates 
991 
(3,880)  Interest and Investment Income 
 
 
(2,240) 
Share of Interest & Investment 
 
 
(321)  Income of associates 
(35) 
Pension interest cost and expected 
 
 
2,686 
return on pension assets 
10,293 
 
Share of pension interest cost and expected 
 
 
 
14,186 
return on pension assets of associates 
16,619 
 
 
 
 
 
604,859 
Net expenditure before reserves movements
586,253 
 
 
 
 
(106,396) Council 
Tax 
 
 
(107,396) 
(357,836)  Revenue Support Grant 
 
 
(372,366) 
 (82,153) 
Non Domestic Rates 
 
 
(91,015) 
 
 
 
 
 
 
 
 
 
 
58,474 
Group deficit for the year 
15,476 
 
 
 
 
96

 
RECONCILIATION OF THE SINGLE ENTITY DEFICIT 
 FOR THE YEAR TO THE GROUP DEFICIT 
 
2008/09 
 2009/10 
(restated) 
Net 
Net 
£000 
£000 
 
 
 
 
Net (surplus)/deficit on the Council’s single entity Income and 
 
42,360 
Expenditure Account for the year  
(1,502) 
 
 
 
Add: (surplus)/deficit arising from other entities included in the group 
 
accounts analysed into the amounts attributable to: 
 
(309) Subsidiaries 
579 
16,423 Associates 
16,399 
58,474 
Group deficit for the year  
15,476 
 
 
 
 
 
GROUP STATEMENT OF TOTAL RECOGNISED  
GAINS AND LOSSES 
2008/09 
 
2009/10  
(restated) 
Net 
Net 
£000  
£000 
 
(58,474) 
Net Income and Expenditure Account deficit  
(15,476) 
 
5,754 
Surplus arising on the revaluation of fixed assets 
166,706 
 
(21,824) 
Actuarial losses on pension fund assets and liabilities 
(297,508) 
 
(101) 
Any other gains or losses recognised in the STRGL 

 
(5,872) 
Net movements not attributable to the General Fund 
(8) 
 
 
(80,517) 
Total recognised losses for the year 
(146,286) 
 
 
 
 
97

GROUP BALANCE SHEET AS AT 31 MARCH 2010 
 
 
31 March 2009 
31 March 2010 
(restated) 
£000 
 £000 
£000 
 
Tangible Fixed Assets 
 
 
 
 
 
 
 
Operational Assets  
 
 
499,419 
Council dwellings 
534,829 
 
733,949 
Other land and buildings 
868,313 
 
25,683 
Vehicles, plant, furniture and equipment 
27,198 
 
254,521 
Infrastructure assets 
267,707 
 
2,045 
Community assets 
2,117 
 
1,515,617 
 
 
1,700,164 
 
 
 
 
 
Non-operational Assets  
 
 
41,315 
Investments  
41,559 
 
10,653 
Assets under construction 
35,591 
 
25,687 
Surplus assets awaiting disposal  
10,977 
 
77,655 
 
 
88,127 
 
 
 
 
1,593,272 
Total Fixed Assets  
 1,788,291 
 
 
 
 
(219,824) 
Investments in associates and joint ventures 
(358,867) 
 
5,907 
Long term investments  
6,240 
 
42,174 
Long term debtors (net of provisions) 
39,736 
 
(171,743) 
Total Long-term Assets 
 
(312,891) 
 
 
 
 
 
Current Assets  
 
 
4,471 
Stock and work in progress 
4,686 
 
87,636 
Debtors  
81,127 
 
(33,061) 
Provision for bad and doubtful debts  
(34,275) 
 
19,239 
Investments (for less than 1 year) 
40,197 
 
106 
Cash and bank 
105 
 
78,391 
 
 91,840 
 
Less: Current Liabilities  
 
 
(99,712) 
Borrowing repayable in less than one year 
(72,532) 
 
(6,774) 
Finance Lease Creditors 
(6,689) 
 
(76,056) 
Creditors (65,538) 
 
(8,503) 
Provisions (12,967) 
 
(2,881) 
Bank overdraft 
(6,618) 
 
(193,926) 
  
(164,344) 
 
 
 
 
1,305,994 
Total Assets less Current Liabilities  
 
1,402,896 
 
 
98

GROUP BALANCE SHEET AS AT 31 MARCH 2010 
 
31 March 2009 
31 March 2010 
(restated) 
 
£000 
 £000 
£000 
 
 
 
 
1,305,994 
Total Assets less Current Liabilities  
 1,402,896 
 
Less:  
 
(500,829)  Borrowing repayable in more than one year   
(556,021) 
 
(139,667)  Finance lease creditors 
(136,171) 
 
(66,857)  Government grants deferred 
(86,006) 
 
(46,155)  Capital contributions deferred 
(46,024) 
 
Liability related to defined benefit pension 
 
 
(146,609)  schemes  
(319,086) 
 
 
 
(1,143,308) 
 
 
 
 
405,877 
Total Assets less Liabilities 
259,588 
 
 
 
Financed by: 
 
 
 
 
 
 
 
Reserves 
 
 
718,719 
Capital Adjustment Account 
760,242 
 
(43,227) 
Financial Instrument Adjustment Account 
(41,053) 
 
41,894 
Revaluation Reserve 
172,244 
 
4,544 
Capital Receipts Reserve 
2,262 
 
(392,356) 
Pension Reserve 
(705,888) 
 
(2,395) 
Employee Statutory Adjustment Account 
(4,542) 
 
327,179 
  
183,265 
 
Fund balances  
 
 
1,321 
Renewal and Repair Fund  
1,385 
 
28,006 
Capital Fund 
32,069 
 
1,134 
Insurance Fund 
1,454 
 
30,461 
 
 
34,908 
 
 
 
 
Revenue account balances  
39,433 
General Fund  
32,611 
 
8,804 
Housing Revenue Account 
8,804 
 
48,237 
 
 41,415 
 
 
 
 
 
 
 
405,877 
Total net worth  
259,588 
 
 
 
 
 
 
 
 
Alan Geddes 
Depute Chief Executive & Director of Finance 
23 June 2010
 
 
99

GROUP CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2010 
 
 
2008/09 
2009/10 
(restated) 
£000 
£000 £000 
  REVENUE ACTIVITIES 
 
  Cash outflows 
 
 
343,120 
Cash paid to and on behalf of employees 
377,953 
 
322,781 
Other operating cash payments 
319,518 
 
28,413 
Housing Benefit paid out 
34,033 
 
694,314   Total outflows 
 
731,504 
 
 
 
 
 
Cash inflows 
 
 
(45,616)  Rents (after rebates) 
(36,200) 
 
(121,990)  Council tax receipts 
(125,139) 
 
(82,136)  National non-domestic rates receipts from the national 
(91,015) 
pool 
 
(357,836)  Revenue support grant 
(372,366) 
 
(52,761)  DWP grants for benefits 
(60,101) 
 
(16,497)  Other government grants 
(18,627) 
 
(48,578)  Cash received for good and services 
(51,289) 
 
(32,666)  Other operating cash receipts 
(40,095) 
 
(758,080)   Total inflows 
 
(794,832) 
  
 
 
(63,766)  Net cash inflow from revenue activities 
 
(63,328) 
 
 
 
 
 
Cash outflows  
 
 
26,780 Interest 
paid 
23,776 
 
9,621 
Interest element of finance lease rentals 
11,978 
 
36,401  
35,754 
 
 
 
 
 
 
Cash inflows 
 
 
(3,001)  Investment income and interest received 
(2,733) 
 
 
 
 
 
Net cash outflow from return on investments and 
33,400 
servicing of finance 
 
33,021 
 
 
 
 
 
Capital activities 
 
 
 
 
 
 
 
Cash  outflows 
 
 
89,258 
Purchase of fixed assets 
75,133 
 
7,441 
Other capital outflows 
4,898 
 
96,699 
Total outflows 
80,031 
 
 
 
 
 
Cash inflows 
 
 
(8,691)  Sale of fixed assets 
(5,979) 
 
(23,254)  Capital grants received 
(25,569) 
 
(5,781)  Other capital cash receipts 
(10,118) 
 
(37,726)  Total Inflows 
(41,666) 
 
 
 
 
 
58,973 
Net cash outflow on capital activities 
 
38,365 
 
 
100

GROUP CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2010 
 
2008/09 
 2009/10 
(restated) 
£000 
 £000 
£000 
 
 
 
 
28,607 
Net Cash outflow before financing 
 
8,058 
 
 
 
 
 
Management of liquid resources 
 
 
(28,449)  Net decrease in short term deposits 
21,447 
 
(7,318)  Net decrease in other liquid resources 
2,692 
 
(35,767)  
 24,139 
 
 
 
 
 
Financing 
 
 
 
Cash outflows 
 
 
399,083 
Repayments of amounts borrowed 
469,975 
 
2,464 
Capital element of finance rental payments 
3,581 
 
401,547 
Total outflows 
473,556 
 
 
 
 
 
 
Cash inflows 
 
 
(25,000)  New loans raised 
(125,700) 
 
(371,151)  New short term loans raised 
(376,315) 
 
(396,151)  Total inflows 
(502,015) 
 
 
 
 
 
5,396 
Net cash (inflow)/outflow from financing 
 
(28,459) 
 
 
 
 
(1,764)  Net decrease/(increase) in cash 
 
3,738 
 
 
 
 
 
 
 
101

 NOTES TO THE GROUP ACCOUNTS  
1. Internal 
trading 
 
Internal trading has been eliminated between Highland Council and its subsidiaries. 
 
2. Associates 
 
The net expenditure of the Highland and Western Isles Valuation Joint Board is fully 
funded by constituent authorities.  The net impact on the Group Income and Expenditure 
Account of consolidating this associate is zero. 
 
The balance sheets of the Northern Joint Police Board and the Highland and Islands Fire 
Board both show net liabilities as at 31 March 2010 therefore the net adjustment is a 
credit.  The net liabilities in the Group Balance Sheet are as a result of the full 
application of FRS 17. 
 
3. 
Borrowing within the group 
 
Borrowing between the Highland Council and its subsidiaries has been eliminated. 
 
Borrowing between the Highland Council and its associates is as follows: 
 
2008/09 
 2009/10 
£000  
£000 
 
Borrowing from Highland Council  
  Repayable in more than 12 months 
18,617 
Northern Joint Police Board 
17,908 
12,211 
Highlands and Islands Fire Board 
11,149 
30,828  
29,057 
 
Repayable in less than 12 months 
 
796 
Northern Joint Police Board 
709 
1,137 
Highland and Islands Fire Board 
1,063 

Highlands and Islands Transport Partnership 
147 
1,933  
1,919 
 
 
 
32,761 
Total borrowing from Highland Council by associates 
30,976 
 
 
 
 
Borrowing from associates  
 
  Repayable in less than 12 months 
15,109 Highland 
Council 
13,562 
 
 
102

 NOTES TO THE GROUP ACCOUNTS  
4. 
Reconciliation between the net deficit per the group Income & Expenditure 
Account to the Net Cash Inflow from Revenue Activities per the Group Cash Flow 
Statement  
 
 

2008/09 
 2009/10 
£000 
 £000 
 
 
 
58,474 
Income and Expenditure Account  deficit 
15,476 
 
 
 
 
Non cash items 
 
(16,423)  Surplus/(deficit) attributable to associates 
(16,399) 
(407)  FRS 17 transactions 
(2,476) 
(81,393) Depreciation 
 
(42,416) 
5,501 
Amortised Government grants and capital contributions  
11,565 
1,605 
Impact of financial instruments 
953 
913 
Gain on sale of assets  
206 
(90,204)  
(48,567) 
 
 
 
 
Items on an accruals basis 
 
1,083 
(Increase) / decrease in stocks 
216 
6,366 
(Increase) / decrease in debtors 
6,622 
(10,894)  Increase / (decrease) in creditors 
2,875 
5,731 
Increase / (decrease) in provisions 
(6,929) 
2,286  
2,784 
 
 
 
 
Items treated as servicing of finance 
 
(37,331) Interest 
paid 
(35,754) 
3,008 Interest 
received 
2,733 
(34,323)  
(33,021) 
 
 
 
   
 
(63,766)  Net cash inflow from revenue activities 
(63,328) 
 
 
5. Employee Statutory Adjustment Account
 
 
Regulations have been introduced which effectively moved injury benefits (police and 
fire officers compensation scheme) outwith the formal police and fire pension schemes. 
A consequence of this is that, under existing legislation, the Pensions Reserve can no 
longer be used to offset the required accounting treatment of these benefits. 
The Scottish Government has issued statutory guidance which allows the affected 
organisations to use an Employee Statutory Adjustment Account to neutralise the 
accounting treatment. This ensures that the accounting entries required to comply with 
injury benefit regulations do not have an impact upon General Fund balances 
 
103

GROUP STATEMENT ON THE SYSTEM OF INTERNAL FINANCIAL CONTROL 
This statement is given in respect of the statement of group accounts for Highland Council 
and its subsidiary and associates. I acknowledge our responsibility for ensuring that an 
effective system of internal financial control is maintained and operated in connection with the 
resources concerned. 
 
The system of internal financial control can provide only reasonable and not absolute 
assurance that assets are safeguarded, that transactions are authorised and properly 
recorded, and that material errors or irregularities are either prevented or would be detected 
within a timely period. 
 
The system of internal financial control is based on a framework of regular management 
information, financial regulations, administrative procedures (including segregation of duties), 
management supervision, and a system of delegation and accountability. Development and 
maintenance of the system is undertaken by management within the Council and the Joint 
Boards.  In particular, the system includes: 
 
• 
Comprehensive budgeting systems. 
 
• 
Regular reviews of periodic and annual financial reports which indicate financial 
performance against the forecasts. 
 
• 
Setting targets to measure financial and other performance. 
 
• 
The preparation of regular financial reports, which indicate actual expenditure against 
forecasts. 
 
• 
Clearly-defined capital expenditure guidelines. 
 
• 
As appropriate, formal project management disciplines. 
 
The Depute Chief Executive & Director of Finance being Treasurer to the Joint Boards has 
overall responsibility for Internal Audit in the Group Organisation described above. The 
Highland Council’s Head of Internal Audit and Risk Management is responsible for the day to 
day management of the service and reports to the Director on management and performance 
issues.  In accordance with the principles of Corporate Governance, regular reports are made 
to the Council and Boards. 
 
The Internal Audit Service operates in accordance with the Code of Practice for Internal Audit 
in Local Government in the United Kingdom and therefore the Head of Internal Audit and Risk 
Management prepares an Annual Report containing a view on the adequacy and 
effectiveness of the system of internal control.  This report is then presented to the Council 
and Boards for their consideration.  
 
My review of the effectiveness of the system of internal control is informed by: 
 
• 
The work of managers within the Board. 
 
• 
The work of the internal auditors as described above. 
 
• 
The external auditors in their annual audit letters and other reports. 
 
 
 
 
 
104

GROUP STATEMENT ON THE SYSTEM OF INTERNAL FINANCIAL CONTROL 
The Annual Internal Audit reports identified the following weaknesses for the group along with 
the agreed remedial action –  
 
Highland Council 
•  Weaknesses relating to Highland Council are detailed in the Corporate Governance 
Statement on pages 71 to 73 of this document.  Appropriate actions to address these 
weaknesses have been agreed. 
 
Highland and Western Isles Valuation Joint Board. 
•  No significant weaknesses were identified. 
 
Highland and Islands Fire Board 
•  Following an audit of the procurement function some matters were highlighted for 
improvement.   Rectifying actions with timescales have been agreed with Board 
officials.  
 
Northern Joint Police Board 
•  Reviews of force payroll and personnel systems identified areas of weakness in 
relation to segregation of duties. A review of corporate governance and risk 
management identified three areas of concern; the absence of a local code of 
corporate governance, the need to update force financial regulations and weaknesses 
in risk management.   Improvement actions with timescales have been agreed with 
Force officials. 
 
I am satisfied that the Council and Boards have in place a sound system of internal control, a 
review of which has identified the above weaknesses and agreed remedial actions. The 
system of internal controls will be further enhanced following implementation of the above 
improvements. 
 
 
 
 
 
 
Alan Geddes 
Depute Chief Executive & Director of Finance 
23 June 2010 

 
 
 
 
 
 
105

STATEMENT OF RESPONSIBILITIES FOR THE STATEMENT OF ACCOUNTS 
 
The Authority's Responsibilities 
 
The Authority is required to: 
 
(i)  
make arrangements for the proper administration of its financial affairs and to 
ensure that one of its officers has the responsibility for the administration of those 
affairs.  In the Highland Council that officer is the Depute Chief Executive & Director 
of Finance; 
  
(ii)  
manage its affairs to secure economy, efficiency and effective use of resources and 
safeguard its assets. 
 
The Chief Finance Officer's Responsibilities 
 
The Depute Chief Executive & Director of Finance of the Highland Council is responsible 
for the preparation of the Authority's Statement of Accounts in accordance with proper 
practices as set out in the CIPFA/LASAAC Code of Practice on Local Authority 
Accounting in the United Kingdom (the SORP). 
 
In preparing this Statement of Accounts, the Depute Chief Executive & Director of 
Finance of the Highland Council has:- 
 
(i) 
selected suitable accounting policies and then applied them consistently, 
 
(ii) 
made judgements and estimates that were reasonable and prudent, and 
 
(iii) 
complied with the SORP. 
 
The Depute Chief Executive & Director of Finance has also:- 
 
(i) 
kept proper accounting records which were up to date, and 
 
(ii) 
taken reasonable steps for the prevention and detection of fraud and other 
irregularities 
 
I, the Depute Chief Executive & Director of Finance of Highland Council, as Chief 
Financial Officer state that the Accounts for the year ended 31 March 2010 give a true 
and fair view of the financial position of the authority as at that date and its income and 
expenditure for the year then ended. 
 
 
 
 
 
 
 
 
Alan Geddes 
Depute Chief Executive & Director of Finance 
23 June  2010 
 
 
106

INDEPENDENT AUDITOR’S REPORT 
Independent auditor’s report to the members of The Highland Council and the 
Accounts Commission for Scotland  
 
I certify that I have audited the financial statements of The Highland Council and its group 
for the year ended 31 March 2010 under Part VII of the Local Government (Scotland) Act 
1973. The financial statements comprise the Income and Expenditure Account, 
Statement of Movement on the General Fund Balance, Statement of Total Recognised 
Gains and Losses, Balance Sheet and Cash-Flow Statement, the Housing Revenue 
Account Income and Expenditure Account, Statement of Movement on the Housing 
Revenue Account Balance, the Council Tax Income Account, the Non-Domestic Rate 
Income Accounts, the Pension Fund Accounts, the Common Good Funds, Charitable, 
Educational and Other Trust Funds Accounts, and the related notes and the Statement of 
Accounting Policies together with the Group Accounts. These financial statements have 
been prepared under the accounting policies set out within them.  
 
This report is made solely to the parties to whom it is addressed in accordance with Part 
V11 of the Local Government (Scotland) Act 1973 and for no other purpose.  In 
accordance with paragraph 123 of the Code of Audit Practice approved by the Accounts 
Commission for Scotland, I do not undertake to have responsibilities to members or 
officers, in their individual capacities, or to third parties. 
 
 
Respective responsibilities of the Depute Chief Executive & Director of Finance 
and auditor  
 
The Depute Chief Executive & Director of Finance’s responsibilities for preparing the 
financial statements in accordance with relevant legal and regulatory requirements and 
the Code of Practice on Local Authority Accounting in the United Kingdom 2009 - A 
Statement of Recommended Practice (the 2009 SORP) are set out in the Statement of 
Responsibilities for the Statement of Accounts.  
  
My responsibility is to audit the financial statements in accordance with relevant legal and 
regulatory requirements and International Standards on Auditing (UK and Ireland) as 
required by the Code of Audit Practice approved by the Accounts Commission for 
Scotland. 
 
I report my opinion as to whether the financial statements give a true and fair view, in 
accordance with relevant legal and regulatory requirements and the 2009 SORP, and 
have been properly prepared in accordance with the Local Government (Scotland) Act 
1973.  
 
In addition I report to you if, in my opinion, the local government body has not kept proper 
accounting records, or if I have not received all the information and explanations I require 
for my audit.  
  
I review whether the Corporate Governance Assurance Statement and the Group 
Statement on the System of Internal Financial Control reflect compliance with the SORP, 
and I report if, in my opinion, they do not. I am not required to consider whether this 
statement covers all risk and controls, or form an opinion on the effectiveness of the local 
government body’s corporate governance procedures or its risk and control procedures.  
 
I read the other information published with the financial statements, and consider whether 
it is consistent with the audited financial statements. This other information comprises the 
Explanatory Foreword and the Statutory Performance Indicators. I consider the 
implications for my report if I become aware of any apparent misstatements or material 
 
107

INDEPENDENT AUDITOR’S REPORT 
inconsistencies with the financial statements. My responsibilities do not extend to any 
other information.  
 
 
Basis of audit opinion 
 
I conducted my audit in accordance with Part VII of the Local Government (Scotland) Act 
1973 and International Standards on Auditing (UK and Ireland) issued by the Auditing 
Practices Board as required by the Code of Audit Practice approved by the Accounts 
Commission. My audit includes examination, on a test basis, of evidence relevant to the 
amounts and disclosures in the financial statements. It also includes an assessment of 
the significant estimates and judgements made by the Depute Chief Executive & Director 
of Finance in the preparation of the financial statements, and of whether the accounting 
policies are most appropriate to The Highland Council and its group’s circumstances, 
consistently applied and adequately disclosed.  
 
I planned and performed my audit so as to obtain all the information and explanations 
which I considered necessary in order to provide me with sufficient evidence to give 
reasonable assurance that the financial statements are free from material misstatement, 
whether caused by fraud or other irregularity or error. In forming my opinion I also 
evaluated the overall adequacy of the presentation of information in the financial 
statements.  
 
 
Opinion  
 
In my opinion the financial statements 
 
•  give a true and fair view, in accordance with relevant legal and regulatory 
requirements and the 2009 SORP, of the financial position of The Highland Council 
and its group as at 31 March 2010 and the income and expenditure of The Highland 
Council and its group for the year then ended; and 
 
•  have been properly prepared in accordance with the Local Government (Scotland) Act 
1973. 
  
  
 
 
 
 
 
 
 
 
 
Mark Taylor CPFA, Assistant Director 
Audit Scotland – Audit Services 
Osborne House,  
1/5 Osborne Terrace 
Edinburgh, EH12 5HG 
 
30 September 2010 
 
108

STATUTORY PERFORMANCE INDICATORS 
Each year the Council has a statutory duty to present indicators, which compare our performance 
over the last 12 months with that of the previous year. This is required by the Local Government in 
Scotland Act 2003 (Section 13) Publication of Information (Standards of Performance Direction 
2001 (Amended)). The Council’s goals and values commit the organisation to striving for 
excellence, innovation, quality and efficiency in delivery of its Services. This is to be achieved 
through regularly reviewing performance and setting targets for continuous improvement. The 
following demonstrates that in a number of areas of activity our performance is improving. 
 
The table below illustrates the movement of the indicators over the past year. 
 
2009/10 
The following key has been used where:  
vs 
2008/09 
9  performance has improved by 5% or more. 
17 
X  performance has declined by 5% or more. 
11 
  there is no significant change in performance  
21 
 
the indicator is new / changed / no comparison is possible / provided for contextual 
purposes only. 
 
 
SICKNESS ABSENCE 
 
INDICATOR 1 – The average number of working days per employee lost through sickness 
absence, for the following groups of staff:  
 
 
Average number of days lost 
Staff Groupings 
08/09 
09/10 
Progress 
Teachers 6.2 
7.3 X 
All other local government employees 
10.6 
11.6 X 
 
 
EQUAL OPPORTUNITIES POLICY 
 
INDICATOR 2 – The number and percentage of the highest paid 2% and 5% earners among 
Council employees that are women. 
 
 
Number of women 
% of posts 
 08/09 
09/10 
08/09 
09/10 
Progress 
In top 2% of all employees 
69 
136 
34.3 
39.2 
9 
In top 5% of all employees 
194 
377 
38.3 
50.4 
9 
 
 
PUBLIC ACCESS 
 
INDICATOR 3 – Public Access 
 
 

08/09 
09/10  Progress
Number of council buildings from which the Council delivers 
166 
170 
 
services to the public 
% of these in which all public areas are suitable and accessible 
80.1 
87.1 
9 
to disabled people 
 
 

 
109

STATUTORY PERFORMANCE INDICATORS 
 
ADMINISTRATION COSTS - Housing Benefit and Council Tax Benefit 
 

INDICATOR 4 – The number of cases for each of the following caseloads and the average 
gross administration cost per case. 
 
 
Number of cases 
The average weighted caseload  
08/09 
09/10 
Rent rebate caseload 
12,891 
13,071 
Private rented sector caseload 
3,968 
3,314 
Registered social landlord caseload 
6,894 
9,168 
Council Tax Benefit caseload 
28,059 
29,280 
 
 
Gross cost per case 
08/09  
09/10 
Progress 
£ 
£ 
Gross administration cost per weighted 
58.35 
57.96 
— 
case- 
 
 

COUNCIL TAX COLLECTION 
 
INDICATOR 5 – Collection costs: the cost of collecting Council Tax per dwelling. 
 
 
08/09 
09/10 
 £ 
£ 
Progress
The cost of collecting Council Tax per dwelling (All dwellings, not 
14.84 14.80 
 
just chargeable) 
 
INDICATOR 6 – Current year council tax income 
 
 08/09 
09/10 
 £,000 
£,000 
a) the income due from Council Tax for the year, excluding 
95,412 
96,094 
reliefs and rebates 
 08/09 
09/10 
 % 

Progress
b) the percentage of (a) that was received during the year 
95.3 
95.0 — 
 
 
PAYMENT OF INVOICES 
 
INDICATOR 7– Payment of invoices 
 08/09 
09/10 
 
% % 
Progress
The number of invoices paid within 30 calendar days of receipt 
86.3 88.2 
 
as a percentage of all invoices paid. 
 
 
ASSET MANAGEMENT 
 
INDICATOR 8 – Condition and Suitability 
 
 
08/09 
09/10 
 m² 
m² 
Gross internal floor area of operational accommodation (m²) 
605,149  673,688 
 
110

STATUTORY PERFORMANCE INDICATORS 
 % 

Progress
a) % of operational accommodation that is in a satisfactory 
61.2 
59.6 — 
condition  
 
 08/09 
09/10 
Number of operational buildings 
1,395 1,412 
 
% % 
Progress
b) % of operational accommodation that is suitable for its 
59.7 56.1 

current use 
 
 
HOME CARE/HOME HELPS 
 

INDICATOR 9 – The level and volume of service of home care clients. 
 
 
Number of home care 
As a rate per 1,000 population 
hours 
aged 65+ 
Level of Service 
08/09 
09/10 
08/09 
09/10 
Progress 
The number of home care hours  10,632 
11,094 
273.8 
278.3 — 
per 1,000 population age 65+ 
 
% of homecare 
No of homecare clients 
 
clients 
Flexibility 
08/09 
09/10 
08/09 
09/10 
Progress 
Total receiving personal care 
1,655 
1,644 
90.1 
82.5 X 
Total receiving a service during  487 
526 
26.5 
26.4 — 
evenings/overnight 
Total receiving a service at 1,134 
1,138 
61.8 
57.1 X 
weekends 
 
 
SPORT AND LEISURE MANAGEMENT 
 
INDICATOR 10a – 
Sport and leisure management 
 
08/09 
09/10 
Progress
a) The number of attendances per 1,000 population for all 
pools 
4,921 
5,203 
9 
 
 
INDICATOR 10b – Attendance at indoor sports facilities excluding pools 
 
 
08/09 
09/10 
Progress
a) The number of attendances per 1,000 population for indoor 
sports and leisure facilities, excluding pools in a combined 
4,040 
3,801 X 
complex 
 
 
MUSEUMS 
 
INDICATOR 11 – Museums 
 
 
08/09 
09/10
Progress
a) The number of visits to/usages of council funded or part funded 
museums per 1,000 population 
2,100 
1,817

 
b) The number of those visits that were in person per 1,000 
795 
881 
9 
population 
 
 
111

STATUTORY PERFORMANCE INDICATORS 
 
INDICATOR 12 – Use of libraries 
 
Borrowers from public libraries: 
08/09
09/10
Progress
a) number of visits per 1,000 population  8,518 9,036

 
 
PLANNING APPLICATIONS PROCESSING TIME 
 
INDICATOR 13 – The percentage of applications dealt with within target time (two months) 
 
 
Number of applications 
Percentage dealt with within two 
months 
Type of applicant 
08/09 
09/10 
08/09 
09/10 
Progress 
Householder 1,219 
1,150 
74.4 
76.3 — 
Non-householder 2,870  2,516 
44.1 
52.5 
 
Total 4,089 
3,666 
53.1 
60.0 

 
 
HOUSING - RESPONSE REPAIRS 
 
INDICATOR 14 – Response Repairs 
 
a)  The target time for each priority category set by the Council 
b)  The number of repairs carried out in each category 
c)  The percentage of repairs completed within the target response times 
 
Priority category set by the Council 
Number 
% completed within 
 
target time 
 08/09 
09/10 
08/09 
09/10 
Progress 
Total number of response repairs 
36,509 
37,953 
88.5 
87.7 — 
Emergency – 24 hours 
9,168 
9,460 
95.5 
95.9 
 
Urgent – 3 days 
11,504 
10,172 
87.6 
85.5 
 
Routine – 20 days 
15,837 
14,024 
85.1 
84.5 
 
 
 
HOUSING QUALITY 
 
INDICATOR 15 –The number and proportion of the council’s housing stock being brought up 
to the Scottish Housing Quality Standard by criteria. 
 
 
Number % 
 
Number of council dwellings 
08/09 
09/10 
08/09 
09/10 
Progress
i)  Tolerable standard 
13,709 
13,602 
100.0 
100.0 
— 
ii) Free from serious disrepair 
13,662 
13,575 
99.7 
99.8 
— 
iii) Energy efficient 
 3,718 
 4,251 
27.1 
31.3 
9 
iv) Modern facilities and 
11,077 11,043 80.8  81.2 
— 
services 
v)  Healthy, safe and secure 
5,652 
13,602 
41.2 
100.0 
9 
vi) Total dwellings meeting 2,719 2,719 19.8 25.8  9 
SHQS 
 
 
 
 
 

 
112

STATUTORY PERFORMANCE INDICATORS 
 
MANAGING TENANCY CHANGES 

 
INDICATOR 16 – Managing tenancy changes 
 
 08/09 
09/10 
 % 

Progress
The total annual rent loss due to voids, expressed as a 
1.6 
1.7 X 
percentage of the total amount of rent due in the year. 
 
INDICATOR 17 – The time taken by the Council to re-let houses, analysed by the following 
time bands  
 
i)Number of houses re-let 
ii) as a % of total for (i) 
Void Period 
NOT low 
NOT low 
demand Low 
Demand demand Low 
Demand 
 08/09 
09/10 
08/09
09/10 
08/09  09/10 
08/09 
09/10 
Less than 2 weeks 
247 
132 

11 
24.6 
14.0 
15.4 
19.0 
2-4 weeks 
250 
293 

13 
24.9 
31.1 
15.4 
22.4 
5-8 weeks 
259 
365 

17 
25.8 
38.7 
15.4 
29.3 
9-16 weeks 
196 
142 

14 
19.5 
15.1 
23.1 
24.1 
More than 16 
52 
10 


5.2 
1.1 
30.8 
5.2 
weeks 
Total 1,004 
942 
13 
58 
100.0  100.0 
100.0 
100.0 
% empty houses that were re-let within 4 weeks 
 
 
 
 
 49.5 
45.1 
30.8 
41.4 
 
 
 
 
Progress 
 

 
 
 
 
 
 
 
 
 NOT 
low 
demand Low 
demand 
 08/09 
09/10 
08/09 
09/10 
 Days 
Days 
Days 
Days 
Average time taken to re-let 
42 
37 
124 
45 
Progress 
 
9 
 
 
 
 
 
113

STATUTORY PERFORMANCE INDICATORS 
RENT MANAGEMENT 
 
INDICATOR 18 – Rent Arrears 
 
 
08/09 
09/10 
Progress
a) Current tenants arrears as a percentage of the net amount 
7.3 
6.9 

of rent due in the year. 
b) % of current tenants owing more than 13 weeks rent at 
5.6 
6.3 X 
year end, excluding those owing less than £250. 
c) % of those tenants giving up their tenancy during the year 
23.1 
24.6 X 
that was in rent arrears. 
Average debt owed by tenants leaving their tenancies with 
£660.74  £651.08 
 
arrears 
d) The average number of weeks rent owed by tenants 
leaving in arrears, as a proportion of the average weekly 
11.0 
10.2 

rent. 
e) % of arrears owed by former tenants that was either 
22.1% 
34.1% 
9 
written off or collected during the year. 
 
 
HOMELESSNESS 
 
INDICATOR 19 – Homelessness 
 
Permanent Accommodation 
08/09 
09/10 
Progress
a(i) The number of households assessed as homeless or  1,140 
1,279 
 
potentially homeless during the year 
a(ii) % of decision notifications issued within 28 days of date  63.0% 
65.8% — 
of initial presentation.  
a(iii) % who are housed. 
47.4% 
59.3% 

a(iv) Number of cases reassessed within 12 months of  51 
69 
 
completion of duty. 
a(iv) % of cases reassessed. 
5.8% 
5.3% 

Temporary Accommodation 
08/09 
09/10 
Progress
a(v) The number of households assessed as homeless or  598 
480 
 
potentially homeless during the year 
a(vi) % of decision notifications issued within 28 days of date  71.1% 
63.5% 
 
of initial presentation.  
a(vii) Number of cases reassessed within 12 months of  16 
31 
 
completion of duty. 
a(vii) % of cases reassessed. 
2.7% 
6.3% 
 
b % of those provided with permanent accommodation in 
council stock who maintained their tenancy for at least 12  88.0% 
89.9% — 
months 
 
 
 
114

STATUTORY PERFORMANCE INDICATORS 
NOISE COMPLAINTS 
 
INDICATOR 20 – Domestic Noise Complaints 
 08/09 
09/10 
Progress
Total Number of Domestic Complaints 
78 
94 
 
a(i) The number of complaints settled without the need for 
22 
56 
 
attendance on site. 
a(ii) The number of complaints requiring attendance on site.
56 
38 
 
a(iii) The number of complaints dealt with under part V of 
the Antisocial Behaviour etc (Scotland) Act 2004. 


 
b(ii) average time between time of complaint & attendance 
19.0 
19.5 
 
on site. 
hours 
hours 
 
 
TRADING STANDARDS ENQUIRIES, COMPLAINTS AND ADVICE 

 
INDICATOR 21 – The number of enquiries, complaints and advice requests received, and 
the percentage completed in the within 14 days. 
 
 
Number received 
% dealt with within 14 days 
 08/09 
09/10 
08/09 
09/10 
Progress
Consumer complaints dealt with within 
1,453 
1,606 
67.4 
69.6 — 
14 days of receipt 
Business advice requests dealt with 
376 
446 
95.5 
93.0 — 
within 14 days of receipt 
 
 
CARRIAGEWAY CONDITION 
 
INDICATOR 22 – The percentage of the road network that should be considered for 
maintenance treatment. 
 
 
Percentage of road network 
Road classes 
08/09 
09/10 
Progress 
A class  
24.9 
23.9 
 
B class  
33.1 
31.1 
 
C class 
32.4 
29.6 
 
Unclassified roads 
40.7 
41.3 
 
Overall 34.5 
33.6 — 
 
 
REFUSE COLLECTION AND DISPOSAL COSTS 
 
INDICATOR 23 – The net cost of refuse collection and refuse disposal 
 
The net cost of: 
08/09  
09/10  
Progress
£ 
£ 
a) Refuse collection (combined domestic, commercial and 
68.20 
68.38 — 
domestic bulky uplift) per premise 
b) Refuse disposal per premise 
171.78 
165.57 — 
 
 
 
 
 
 

 
115

STATUTORY PERFORMANCE INDICATORS 
REFUSE RECYCLING 
 
INDICATOR 24 – The amount and percentage of municipal waste collected by the Council 
during the year that was recycled or disposed of by the following methods: 
 
 
Total Tonnes 
% municipal waste 
 
Method 
Progres
08/09 
09/10 
08/09 
09/10 

Composted 18,845.8
19,832.0 
11.7 
36.2 
 
Recycled 33,890.8
34,919.0 
21.0 
63.8 
 
Total composted / recycled 
52,736.6
54,751 
32.7 
34.6 

 
 
 
 
 
 
Total tonnes 
161,144 
161,144 
 
 
 
 
 
STREET CLEANLINESS 
 
INDICATOR 25 – The cleanliness index achieved following inspection of a sample of streets 
and other relevant land. 
 
 
08/09 
09/10 
Progress 
 
Overall Cleanliness Index 
77 
78 — 
 
 
116

STATUTORY PERFORMANCE INDICATORS 
 
Please contact the following with any queries 
  
No Indicator 
Contact 
Name 
Telephone 
Number 

1-2 
Sickness Absence / Equal Opportunities 
Murdo MacDonald 
01463 702028 

Public Access 
Finlay MacDonald 
01463 702211 

Benefits Administration 
Mark Peden 
01463 702213 
5/6 
Council Tax Collection 
Mark Peden 
01463 702213 

Payment of Invoices 
Charlie MacCallum 
01463 702334 

Asset Management 
Caroline Campbell 
01463 702610 

Home Care/ Home Helps 
George Maldonado 
01463 703553 
10 
Sport and Leisure Management 
Jonathan Warde 
01349 860989 
11 
Museums 
Judi Menabney 
01463 702038 
12 
Libraries 
Ian Dalrymple 
01463 251253 
13 
Planning and Development Services 
Richard Hartland 
01463 702254 
14-19 
Housing 
Caroline Campbell 
01463 702610 
20 
Noise Complaints 
Neil Downie 
01463 702651 
21 
Trading Standards 
Neil Downie 
01463 702651 
22 
Carriageway Condition  
Neil Downie 
01463 702651 
23 
Refuse Collection and Disposal 
Neil Downie 
01463 702651 
24 
Refuse Recycling 
Neil Downie 
01463 702651 
25 
Cleanliness 
Neil Downie 
01463 702651 
  
 
117

Document Outline