Glossary of Terms
The 'outturn' or the actual income or expenditure incurred during the financial year. It refers to the amount spent against the budget in that period.
Affordable Borrowing Limit
A requirement to ensure that total capital investment remains within sustainable limits and, in particular, that the impact upon its future council tax levels is 'acceptable'.
Agency and Contract Payments
Payments to third parties for the provision of services not provided directly by Council employees.
The formal review of activities by people or agencies not otherwise responsible for those activities. Originally used for the periodic review of financial transactions but now increasingly used also for any independent review, usually ad hoc, of any activities.
Band 'D' Equivalents
This term relates to one of the Council Tax valuation bands. The bands 'A' to 'C' and 'E' to 'H' are weighted (x/9ths) to the equivalent of Band 'D'. This derived band 'D' equivalent is used as a basis for calculating the Council Tax.
This is the duty which local authorities owe to their stakeholders to provide relevant, cost effective services. All services are expected to be reviewed once in every five years.
This is an authority such as Hastings which is responsible for collecting the Council Tax and Non Domestic Rates.
A statement of Hastings' plans for revenue or capital expenditure over a specified period of time. The annual budget is prepared as part of the Council's annual Council Tax setting process.
This is expenditure on the acquisition of assets, or expenditure which adds to and not merely maintains the value of an existing asset. Section 16 of the Local Government Act 2003 defines 'expenditure for capital purposes'. Expenditure outside this definition must be charged to the Revenue Account. A fixed asset is one which generally yields benefits to the local authority for a period exceeding one year.
This is the raising of money to pay for capital expenditure, for example by borrowing, leasing, capital receipts, revenue or grants.
This outlines the capital schemes that the Authority proposes to undertake over a set time; Hastings has a four year capital programme.
These are monies received from the disposal of an interest in a capital asset. An asset is a capital asset if at the time of disposal, expenditure on the acquisition of the asset would be capital expenditure. Sums are 'usable' to finance further capital expenditure.
This fund is administered by each billing authority and all proceeds from the Council Tax are paid into the fund to meet the net budget requirements of the County Council, Police Authority and Borough Council.
A sum put aside to cover unforeseen expenditure during the period of the budget.
These are costs which are of a necessity and/or benefit to most services and include bank charges, Audit Commission fees, central telephone switchboard costs, costs associated with the Data Protection Act, and other cross-cutting issues. Bank charges and Audit fees remain as an unallocated corporate cost.
A document which the Council must produce annually to describe its short-term and long-term ambitions for the town. It demonstrates how it will achieve this, how well it has met its targets in the previous plan, and provides residents with a chance to judge the Council's performance.
Council Tax is paid on most residential properties in a local authority's area. Properties are valued within eight valuation bands (A-H, see also the report to Cabinet on the Budget and Council Tax).
Council Tax Base
A calculation which determines how much will be collected for every £1 of Council Tax at Band D. It relates to the number of dwellings in each of the valuation bands, their relationship to Band D multiplied by the % collection rate.
This is the cost of administering Council, Cabinet and Committee meetings. It includes the salaries of the Committee Clerks together with other expenses such as Members Allowances, refreshments at meetings and printing agendas.
This consists of salaries, national insurance, pensions, plus any allowances of staff employed on the service. The costs of recruitment and training are also included.
External Interest consists of payments to the Public Works Loan Board (PWLB), banks, other financial institutions, and other local authorities in respect of interest incurred on borrowing undertaken to fund the activities of the authority.
These are tangible assets that yield benefit to local authorities and the services it provides for more than one year.
An increase in expenditure not due to inflation/price changes.
An allowance to persons on low income (or none) to meet in whole or part their rent. Benefit is allowed or paid by local authorities but Central Government refunds part of the cost of the benefits and of the running costs of the service to local authorities. Benefit paid to the authority's own tenants is known as 'rent rebate' and that paid to private sector tenants as 'rent allowances'.
Minimum Revenue Provision (MRP)
Capital expenditure is generally expenditure on assets which have a life expectancy of more than one year e.g. buildings, vehicles, machinery etc. It would be impractical to charge the entirety of such expenditure to revenue in the year in which it was incurred and so such expenditure is spread over several years so as to try to match the years over which such assets benefit the local community through their useful life. The manner of spreading these costs is through an annual Minimum Revenue Provision, which was previously determined under Regulation, and will in future be determined under Guidance.
National Non Domestic Rates (Business Rates)
These are paid on commercial, business and non residential properties. The Government determines the level, although the Council is responsible for its billing and collection. The proceeds are pooled nationally and then redistributed amongst local authorities on a per capital basis.
This is the levy made by precepting authorities (such as East Sussex County Council and the Sussex Police Authority) on a billing authority (Hastings Borough Council), requiring the latter to collect income from the Council Taxpayers on their behalf
All costs associated with running a building, including repairs and maintenance, energy costs, rent and rates, insurance and cleaning costs.
Provisions, Reserves and Balances
These are amounts set aside in one year to cover expenditure in the future. Provisions are for liabilities or losses which are likely or certain to be incurred, but the amounts or the dates on which they will arise are uncertain. Reserves are amounts set aside which do not fall within the definition of provisions and include general balances which every authority must maintain as a matter of prudence.
The code introduced a need for local authorities to consider capital spending plans with reference to affordability (implications for Council Tax), prudence and sustainability, value for money, stewardship of assets, strategic objectives and the practicality of the plans.
The local authority accounting code of practice requires that Support Service costs be fully recharged to services except for those relating to corporate matters and democratic processes.
This is expenditure on the day to day running of the authority, for example staff costs, premises related expenditure, transport and supplies and services.
Revenue Support Grant (RSG)
This is a grant paid by Central Government in support of general net revenue expenditure. The amount is calculated with reference to an area's assessed needs and a share from National Non Domestic Rates based on population.
Standing Instructions/Financial Rules and Operating Procedures
A scheme of delegated authority given to officers of the Council, and the financial rules under which they must operate.
Supplies and Services
Examples include: Equipment and materials, printing and stationery, telephones, postages, computer services, office furniture, advertising and publications, fees for professional services.
Support Service Costs
These are made up of administrative buildings and office services such as Legal, Personnel, Accountancy, Information Technology and Estates Management.
The estimated sum receivable from each £1 of council tax levied, calculated with reference to the number of domestic properties in each valuation band assessed for the tax, less any assumptions for discounts, exemptions and irrecoverable amounts.
The principle that all unit costs and other comparable costs should include apportionments of all relevant overheads and support service costs.
Payments such as Housing Benefit and Council Tax benefit or discretionary business rate relief.
All costs associated with vehicles and transport, including car mileage allowances, public transport costs and fuel costs.
This is the permission to spend more on one budget head when this is matched by a corresponding reduction on some other budget head. Virements must be properly authorised by the Cabinet or by officers under delegated powers.