The Council has incurred the following costs in relation to the audit of the Statement of Accounts, certification of grant claims and statutory inspections and to non-audit services, provided by the Council's External Auditors Ernst and Young LLP.

* Restated

The additional fees determined by PSAA for the 2021/22 audit were £0.125m. £0.100m was reported in the disclosure note for 2021/22, leaving £25,000 reported in the 2023/24 column.

In 2022/23, £29,000 was reported as the estimated cost of the certification of grant claims and returns during the year. The actual cost of these claims in 2023/24 was £48,000, leaving £19,000 reported as an additional fee in the 2022/23 column.

In 2021/22, £29,000 was reported as the estimated cost of the certification of grant claims and returns during the year. The actual cost of these claims (plus one claim from a prior year) was £46,000, leaving £17,000 reported as an additional fee in the 2023/24 column.

Note 32.1 Senior Officers' Remuneration

Senior officers with a salary of more than £150,000 are required to be disclosed by name and title; those with a salary of less than £150,000 are disclosed by title only. For Bexley, the senior officers disclosed below are the Corporate Leadership Team, the Director of Public Health and the statutory Monitoring Officer - in Bexley, this is the Deputy Director of Corporate Services.

• For the period 23 October 2023 to 8 November 2023, Paul Thorogood was covering the Chief Executive and Director of Finance & Corporate Services posts
• The Chief Executive Directorate was set up on 23 October 2023
• The member of staff who previously held the post of Head of Risk and Assurance has been excluded due to materiality

Note 32.2 Remuneration Bands

The number of Council employees (including teachers) whose remuneration was £50,000 or more in bands of £5,000 is shown below, split between schools and other staff. Remuneration includes all taxable sums paid to or received by an employee. Payments include salary (including performance-related pay), redundancy, expenses and other benefits received other than in cash (e.g. leased car benefit), excluding pension contributions. The figures also exclude voluntary aided schools whose staff are not employed by the London Borough of Bexley. The Chief Executive, Directors and the Monitoring Officer have been excluded from the table below since they are shown separately in the next table in this note.

One person whose remuneration would have otherwise been below £50,000 is included in the £50,000 - £54,999 band because of a redundancy payment.

Note 32.3 Exit Packages

The numbers of exit packages with a total cost per band and total cost of the compulsory and other redundancies are set out in the table below:

The Council's expenditure on Schools is funded primarily by the Dedicated Schools Grant (DSG). The DSG allocation is calculated on a pupils based formulae. An element of DSG is recouped by the department to fund academy schools in the area. The Central element of the Schools Budget covers local authority expenditure on high needs, early years, pupil-related revenue costs arising from schools expansion and certain specified central services. DSG is ring-fenced and can only be applied to meet expenditure properly included in the Schools Budget. Details outlining the deployment of DSG received for 2022/23 and 2023/24 are as follows:

Bexley has entered into an agreement with the Department for Education under the Safety Valve Programme aimed at eliminating the deficit on the Dedicated Schools Grant which has arisen in recent years due to cost pressures within the High Needs budget. The agreement sets out a six year plan for how Bexley will mitigate cost pressures to arrive at an in-year balance on the budget by 2027/28 and to eliminate the accumulated deficit by March 2029. As part of the agreement the Department for Education has agreed additional Dedicated Schools Grant funding and an initial instalment of £11.960m was received in March 2023. Further instalments totalling £3.490m were received during 2023/24.

As at 31 March 2023 Bexley had accumulated a deficit of £5.460m, represented by a deficit of £16.335m in the DSG unusable reserve and a surplus in the DSG earmarked reserve of £10.875m. In 2023/24, Bexley had an in-year surplus of £1.019m. A carry forward of £10.875m to 2024/25 has been agreed in advance. The net accumulated position on the Dedicated Schools Grant therefore stands at a deficit of £4.441m as at 31 March 2024.

The 2023/24 outturn was assisted by an accelerated receipt of Safety Valve funding of £0.930m, received in March 2024 rather than in 2024/25 as originally anticipated.

Other long term liabilities are made up of the following items.

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 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. council tax bills, housing benefits).

The Council has prepared this disclosure in accordance with its interpretation and understanding of IAS 24 and its applicability to the public sector utilising current advice and guidance.

Related party transactions that need to be disclosed are those where a Council Member or senior officer has control over one party to the transaction and significant influence over the other. For Bexley, the only Council Members who would have control over one party to a transaction would be the Members of the Cabinet. This also applies to senior officers. The transactions in the table below have been identified for 2023/24. In addition, there are separate disclosures elsewhere within the accounts for senior officer remuneration and members’ allowances.

Some of the appointments listed below continued throughout 2023/24. The declaration of a related party transaction does not imply any personal involvement of the Councillors and officers shown below. Transactions between the London Borough of Bexley and other organisations that total less than £10,000 in the year are not included in this note.

Members

The following Members held positions of control or significant influence in related parties to the Council during 2023/24:

• Councillor Teresa O’Neill OBE held the position of Vice-Chair of the London Government Association until July 2023, and was on the London Councils Committee
• Councillor Andrew Curtois is a Director of the Engine House
• Councillor Brian Bishop is a director of North Kent Masonic Hall Limited
• Councillor Cafer Munur is a Director of Bexleyheath Business Partnership Ltd and has a close family member who is a Director of Just Therapy Ltd
• Councillor Cameron Smith is a Director of Greater Digital Ltd
• Councillor Cheryl Bacon is the Director of the Engine House
• Councillor Daniel Francis is an Unpaid Director of the Belvedere Community Forum
• Councillor David Leaf is the Vice-Chair of the London Councils Grants Committee, a Local Government Association Resources Board member, and the Chairman of the Eltham Crematorium Committee
• Councillor Geraldene Lucia- Hennis is Director of Dartford and Crayford Creek Restoration Trust
• Councillor James Hunt is a Non-Executive Director of Bird College, a Trustee of Bexley District Scouts, a Trustee of Greater London South East Scouts Council and Chair of 1st North Cray Scout Group
• Councillor John Davey is Chairman of the Bexley Arts Trust and a Board Member of the Engine House
• Councillor Patrick Adams is a Director of the Engine House and a Director of Sound Core Ltd
• Councillor Peter Craske is and Executive Member of the London Councils Transport and Environment Committee
• Councillor Rags Sandhu is a Trustee of Dartford Lions Club
• Councillor Richard Diment is a Director of Eltham Crematorium Joint Committee
• Councillor Sally Hinkley is a Director of the Belvedere Community Centre and Trustee & Treasurer of St Augustines pre-school
• Councillor Steven Hall is the representative on the London Councils Greater London Employment Forum
• Councillor Sue Gower has a close family member who is the Chief Executive Officer of Crossroads Care SE London

Council Officers

• Officer Matthew Norwell is Trustee of The Marlow Trust
• Officer Jackie Belton is Director of Public Private Partnerships Limited, 4PS Limited and Kelling Associates Ltd

Creditors relating to BexleyCo Ltd were £13,000 at 31 March 2024. The BexleyCo Ltd Loans of £2.943m shown above includes £0.205m of shareholder loans which are held in Long Term Investments in the Balance Sheet.

Engine House Bexley Limited (formerly Thames Innovation Centre -TIC)

The Engine House is a not-for-profit local Council controlled company that commenced trading at the end of 2006. The London Borough of Bexley has made a loan to TIC of £0.450m as of 31 March 2018 under a loan agreement dated 14 March 2007. No interest was charged within the initial ten year period from the date of the agreement.

Under a service level agreement dated 29 March 2007, the Council is entitled to reasonable free use of TIC’s facilities.

Furniture and equipment valued at £0.432m were transferred from the Council to TIC on 29 March 2007. These assets will revert back to the Council at the end of the service level agreement on 31 March 2027. There is a further loan agreement dated 10 February 2010 between the London Borough of Bexley and TIC, providing up to £60,000 for TIC to undertake internal works to convert two existing offices into six smaller offices. Interest is charged at 0.5% above the Public Works Loan Board 10 year annuity rate.

As of 31 March 2024, the amount outstanding on the loan facilities was £0.450m plus accrued interest of £0.103m.

BexleyCo Limited

BexleyCo Limited is a development and regeneration company that was incorporated by the Council in June 2017. It is a company limited by shares with the Council as the sole shareholder. Its primary activity will contribute to the Council's regeneration and commercialism agenda by purchasing and developing real estate.

The Company’s Business Plan sets out the aims and objectives of the Company, its structure and key activities. This second Business Plan introduces diversification to both maximise the return and deliver it within a reduced timescale to the Council. The central aim of securing a strong delivery vehicle for housing and other development activity remains.

As of the 31 March 2024, the Council had made loans to Bexley Co of £2.533m for development at Sargasso House, £7.513m for development at Old Farm Place and £0.409m for development at Sedgemere Road. The Old Farm Place loan has been fully repaid (£5m in 2021/22 and £2.513m in 2022/23). The outstanding balance of loans and other debtors from BexleyCo Ltd is shown in the table above.

The audited accounts for BexleyCo as of 31 March 2024, showed a net loss of £0.270m (net profit of £1.947m 2022/23) and a net assets balance of £9.469m (£9.752m in 2022/23).

Central Government

The Council received a number of grants - both revenue and capital - from Central Government. Further details of these are given in Note 13.

London Borough of Bexley Pension Fund

The Council recharged £0.284m  to the Pension Fund in 2023/24 (£0.228m in 2022/23) for administration costs. The Interim Director of Finance & Corporate Services for the London Borough of Bexley allocates 5% of their time to the Pension Fund. During the year, no Council Members or designated officers have undertaken any declarable transactions with the Pension Fund.  There are 11 Council members who sit as members of the Pensions Committee.

NEW TABLE

The total amount of capital expenditure incurred in the year is shown in the table below (including the value of assets acquired under finance leases and PFI contracts), together with the resources that have been used to finance it. Where the capital expenditure is to be financed in future years by charges to revenue as assets are used by the Council, the expenditure results in an increase in the Capital Financing Requirement (CFR), a measure of the capital expenditure incurred historically by the Council that has yet to be financed. The CFR is analysed in the second part of this note.

Council as Lessor

Finance Leases

The Council has leased out four properties, Welling United Football Club ground, Erith Shopping Centre, Bexleyheath Bowling Centre and Whitehall Lane. The Council has a gross investment in the lease, made up of minimum lease payments expected to be received over the remaining term. The minimum lease payments comprise settlement of the long-term receivable for the interest in the property acquired by the lessee and finance income earned by the Council.

Operating Leases

The future minimum lease payments due under non-cancellable leases in future years are set out below:

Council as Lessee

Finance Leases

The Council leases 49 vehicles for waste collection and recycling from Countrystyle; the contract is due to last until March 2031. The following information presents the minimum lease payments due and the balance of outstanding liabilities as of the year-end.

Operating Leases

The future minimum lease payments due under non-cancellable leases in future years are:

The Council has contracted with Investors in the Community (IIC) for the redevelopment and facilities management of Welling and Bexleyheath academies to provide education services for Bexley pupils. Annual payments commenced during 2005/06 for 25 years and are currently £7.200m, of which 55% will increase annually in line with RPIX and 45% is fixed. They can also vary as a result of performance and availability deductions, benchmarking, certain changes in law and contract variations initiated by the Council. Renewal and termination options and other rights and obligations are available to the Council under the terms of the agreement. The costs are being met from the annual PFI grant provided by the government of £3.056m together with academy contributions and other school budgets approved by the Council.

The Council has also contracted with Parkwood Leisure for the redevelopment and operation of its sports and swimming centres, including both routine and lifecycle building maintenance. The annual payments (the unitary charge) are currently £2.841m, which are inflated by 3% each year. These payments commenced during 2005/06 and are payable over 30 years. They can vary as a result of performance and availability deductions, certain changes in law and contract variations initiated by the Council. In addition, the operational services are benchmarked every five years and at a future benchmarking date (2020 or later) may be market-tested. At July 2010 benchmarking, it was agreed no change would be made to the unitary charge and in July 2015 a unitary charge reduction of £0.300m per annum was agreed. The costs are being met from budgets approved by the Council. At the end of the contract term, which is fixed, all the facilities return to the Council for nil consideration.

The associated unitary charges are now separated into three elements: service charge, repayment of the liability and interest, which are met from the Council’s revenue account. The PFI payments are due to be made for the next 7 years until 2031. The PPP payments will be made for the next 12 years until 2036. An analysis of the payments in 2022/23 and 2023/24 is shown in the table below:

The Council makes an agreed payment each year which is increased by inflation and can be reduced if the contractor fails to meet availability and performance standards in any year but which is otherwise fixed. Payments remaining to be made under the PFI contracts at 31 March (excluding any estimation of inflation and availability performance) and PPP contracts, which have been uplifted annually by 3% as per the contract are shown below:

Teachers employed by the Council are members of the Teachers’ Pension Scheme, administered by Capita Teachers’ Pension on behalf of the Department for Education. The Scheme provides teachers with specified benefits upon their retirement, and the Council contributes towards the costs by making contributions based on a percentage of members’ pensionable salaries.

The scheme is a multi-employer defined benefit scheme. The scheme is unfunded and the Department for Education uses a notional fund as the basis for calculating the employers’ contribution rate paid by local authorities. Valuations of the notional fund are undertaken every four years.

The scheme has more than 12,357 participating employers and consequently, the Council is not able to identify its share of the underlying financial position and performance of the scheme with sufficient reliability for accounting purposes. For the purposes of this Statement of Accounts, it is therefore accounted for on the same basis as a defined contribution scheme.

In 2023/24 the Council paid £4.621m (2022/23 £4.532m) to Teachers’ Pensions in respect of teachers’ retirement benefits, representing 33% of contributory salary of £14.012m.  There was £0.406m of contributions remaining payable at the year-end.

The Council is responsible for the costs of any additional benefits awarded upon early retirement outside of the terms of the teachers’ scheme. These costs are accounted for on a defined benefit basis and detailed in Note 40. The Council is not liable to the scheme for any other entities’ obligations under the plan.

There are also some staff who are members of the National Health Service Superannuation Scheme administered by the Department of Health. This scheme is also an unfunded multi-employer defined benefit scheme. In the NHS, the scheme is accounted for as if it were a defined contribution scheme.

Participation in Pension Schemes

As part of the terms and conditions of employment of its officers, the Council makes contributions towards the cost of post-employment benefits. Although these benefits will not actually be payable until employees retire, the Council has a commitment to make the payments (for those benefits) and to disclose them at the time that employees earn their future entitlement.

The Council participates in two post-employment schemes:

• The Local Government Pension Scheme (LGPS), administered locally by the Council - this is a funded defined benefit scheme, meaning that the Council and employees pay contributions into a fund, calculated at a level intended to balance the pensions liabilities with investment assets
• arrangements for the award of discretionary post-retirement benefits upon early retirement - this is an unfunded defined benefit arrangement, under which liabilities are recognised when awards are made. However, there are no investment assets built up to meet these pensions liabilities, and cash has to be generated to meet actual pensions payments as they eventually fall due

The London Borough of Bexley pension scheme is operated under the regulatory framework for the Local Government Pension Scheme and the governance of the scheme is the responsibility of the Pensions Committee of the London Borough of Bexley. The policy is determined in accordance with the Pension Fund Regulations.

The principal risks to the Council of the scheme are the longevity assumptions, statutory changes to the scheme, structural changes to the scheme (i.e. large-scale withdrawals from the scheme), changes to inflation, bond yields and the performance of the equity investments held by the scheme. These are mitigated to a certain extent by the statutory requirements to charge to the General Fund the amounts required by statute as described in the accounting policies note.

Transactions Relating to Post-employment Benefits

The Council recognises the cost of retirement benefits in the reported cost of services when they are earned by employees, rather than when the benefits are eventually paid as pensions. However, the charge the Council is required to make against council tax is based on the cash payable in the year, so the real cost of post-employment/retirement benefits is reversed out of the General Fund via the Movement in Reserves Statement. The transactions in the table below have been made in the Comprehensive Income and Expenditure Statement and the General Fund Balance via the Movement in Reserves Statement during the year.

Eltham Crematorium

When Eltham Crematorium was devolved, the sum of £0.834m was incorporated in the Bexley Balance Sheet to recognise a historic liability obligation in respect of Eltham Crematorium pension fund.

London Pension Fund Authority

When the Greater London Council was disbanded, Bexley was allocated 1.23% of the fund, which currently represents a liability of £0.356m. As at the date of the latest fund valuation (31 March 2022) there were three members receiving funded benefits,  In addition, there is one member of the scheme receiving unfunded benefits.

40.1 Balance Sheet Pension Fund Schemes

**The 31 March 2023 liability for the London Pension Fund Authority (LPFA) reflects the position as at 31 March 2022. The balance was not available when the 2022/23 Statement of Accounts was prepared, therefore the 2022/23 movement of £25,000 is reflected in 2023/24. The LPFA scheme is not included in the disclosures at Notes 40.2 to 40.6 due to materiality.

In 2022/23 the net position on the Local Government Pension Scheme moved from being a net liability to a net asset. This shows that the Council is currently assessed to have paid more into the pension than the liabilities it has to meet for the pensions earned to date by employees. The fund remained in a net asset position as at 31 March 2024.

40.2 Movements in CIES and MIRS

The following transactions have been made in the Comprehensive Income and Expenditure Statement and the General Fund Balance via the Movement in Reserves Statement during the year.

40.3 LGPS Pension Assets and Liabilities Recognised in the Balance Sheet

40.4 Reconciliation of the movements in the current value of scheme (plan) assets and liabilities

40.5 Local Government Pension Scheme assets comprised:

40.6 Assumptions and Sensitivity

Liabilities have been assessed on an actuarial basis using the projected unit credit method, an estimate of the pensions that will be payable in future years dependent on assumptions about mortality rates, salary levels, etc. Under the projected unit method the current service cost will increase as members of the scheme approach retirement (where there is an increase in the age profile of the active membership). Both the Local Government Pension Scheme and Discretionary Benefits liabilities have been assessed by Mercer Ltd, an independent firm of actuaries, estimates for the Council Fund being based on the latest full valuation of the scheme as of 31 March 2022.

The principal assumptions used by the actuary have been:

The estimation of the defined benefit obligations is sensitive to the actuarial assumptions set out in the table above. The sensitivity analysis below has been determined based on reasonably possible changes of the assumptions occurring at the end of the reporting period and assumes for each change that the assumption analysed changes while all the other assumptions remain constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be interrelated. The estimations in the sensitivity analysis have followed the accounting policies for the scheme, i.e. on an actuarial basis using the projected unit credit method. The methods and types of assumptions used in preparing the sensitivity analysis below did not change from those used in the previous period.

Impact on the Council’s Cash Flows

The objectives of the scheme are to keep employers’ contributions at as constant a rate as possible, subject to the administering Council not taking undue risk. The most recent valuation of the Fund took place as at 31 March 2022. This showed that the Fund is 114% Funded. The next triennial valuation is due to be as at 31 March 2025. This will be completed in 2025/26.

There were national changes to the scheme under the Public Pensions Services Act 2013. The Act provides for scheme regulations to be made within a common framework, to establish new career average revalued earnings schemes to pay pensions and other benefits to certain public servants. The new scheme for local government was set out in the LGPS Regulations 2013.

The total amount of contributions expected to be made to the Local Government Pension Scheme by the Council in the year to 31 March 2025 are is £9.488m. This includes expected contributions for the Discretionary Benefits scheme £0.583m.

The weighted average duration of the defined benefit obligation for scheme members at the latest valuation date of 31 March 2022 is 16 years (15 years at 31 March 2019).

At 31 March 2024, the Council had the following material contingent liabilities:

The Council has lodged an application for injunction and expert determination in the High Court related to a potential obligation under an agreement with London & Quadrant Housing. The existence of the obligation will be confirmed as part of the expert determination process. The Council estimates that its costs related to this case are likely to exceed £100,000. The Council also considers there to be a possibility of London & Quadrant Housing launching counterclaims following the Council's injunction applications, the values for which cannot be reliably estimated at this stage. However, the Council considers the likelihood of success of the claim is low.

A claim has been made against the Council by Right Support Management relating to a care case. This claim exceeds £500,000. The Council is defending this case but the outcome is not wholly in its control, so this has been assessed as a contingent liability. However, the Council considers the likelihood of success of the claim is low.

A claim for losses has been made against the Council by Lazpro Ltd concerning the sale of homes in a redevelopment site. This claim exceeds £1m. This has been assessed as a contingent liability as the outcome of the claim is not wholly in the Council's control. However, the Council considers the likelihood of success of the claim is low.

The Council did not have any material contingent assets at 31 March 2024.