Merseyside Integrated Transport Authority Statement Of Responsibilities For The Statement Of Accounts


Merseyside Integrated Transport Authority

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Merseyside Integrated Transport Authority


Explanatory Foreword (Cont'd)

4. Revenue Financing


The Authority receives direct revenue support from the five Merseyside District Councils through levying procedures. Central Government contributed towards this support through the RSG Settlement; by providing Special Rail Grant to specifically prevent the extra costs of rail privatisation falling upon the Council Taxpayer; and provision of direct grant to fund the National Concessionary Travel Scheme.
5. Merseytram
TWA powers were granted by the Government (SI 2005 No 210) for the construction and operation of Merseytram Line 1, and as a consequence detailed design and certain advance works were carried out. During 2005/06 the Government withdrew its £170m funding contribution, effectively stalling the good progress made on the development of Merseytram. TWA powers exist until 2010 and alternative means of financing are being explored through LTP2.
6. Capital Programme
In 2008/09 the Authority provided Capital grants to the Executive (£29.2m) along with direct capital investment on the Mersey Tunnels (£1.7m) totalling £30.9m. Details of a sample of expenditure is as follows:-
(a) Mersey Tunnels projects including completion of ventilation fan refurbishments and improvement to Tunnels Infrastructure at a total cost of £1.7m.

(b) Works on a new Pier Head Ferry Terminal Building (costing in excess of £18m over 2 years). This includes the development of a visitor attraction: The Beatles Story. Also included is a visitor attraction at Woodside Ferry Terminal: U-534 at a cost of some £4m.


  1. Substantial progress in Merseytravel’s visionary programme to improve integrated public transport along 15 major corridors and 3 centres in Merseyside costing £2.9m (costing some £25m over several years).


  2. Projects to revitalise Sandhills railway station and to provide rail access to the Port of Liverpool via Olive Mount Chord (at a cost of some £7m in 2008/09).

7. Capital Financing


During the year, the Capital Programme was financed as follows:






£m

Under borrowing at 1/4/08 b/fwd

4.6

Capital Expenditure in 2008/09

30.9

Re-borrowing principal repayments during

the year that exceeded MRP



-

Extinguished loans during 2008/09

-

Sub-Total

35.5

Actual borrowing during 2008/09 - Ordinary

-

- Prudential

(5.0)

- Replacement Loans

-

Reserves/Contributions

(3.9)

Revenue Contributions


-

Renewals Fund

(1.7)

Grants

(24.8)

Under/(over) Financing c/fwd

0.1

8. Tunnels Reserve


There is an accounting policy that expresses an intention that the Tunnels Reserve be maintained at a level of £2.5m or above. The Tunnels Reserve stood at £5.8m as at 31 March 2009. Approximately £3m of this reserve is earmarked for financing an underspend of 2008/09 Tunnels’ Capital Programme which rolls forward into 2009/10.


Merseyside Integrated Transport Authority



Explanatory Foreword (Cont'd)

9. Tunnels Quinquennial Valuation of Fixed Assets


A quinquennial valuation was undertaken as at 31 March 2009. The value of the asset increased by some £0.5bn, rising from £0.3bn to £0.8bn. The revaluation methodology reflects a CIPFA Review/ Guidance on Infrastructure Asset Valuation (2008) which now requires depreciated replacement costs to be that of a modern equivalent, adjusted to reflect the current age, condition and performance of the asset.
10. Publishing Statements of Accounts

FRS21 requires a disclosure note giving details of when the accounts will be published; the means of issue; and the authorising officer. As from 30 June 2009 the Authority’s accounts will be placed on Merseytravel’s website (www.merseytravel.gov.uk). This has been authorised by J R Barclay, the Director of Resources.

11. EMU
Where systems hold monetary values, primarily accounting and payroll systems, EPOS tills etc, assurances are being sought that upgrades will be available in the event of the UK joining EMU. There were no direct costs relating to EMU in 2008/09.

The Accounting Policies and Accounting Statements on pages B8 to B54 are approved and signed on behalf of the Authority.

…………………………………………………….. ………………………………………………………….

Chair of Authority Date of Meeting


Merseyside Integrated Transport Authority
Statement Of Accounting Policies

1. Introduction


The main principles adopted in compiling the accounts are outlined below. They follow the generally accepted accounting conventions for Local Authorities as recommended by the Chartered Institute of Public Finance and Accountancy and comply with the Revised Code of Practice on Local Authority Accounting issued during 2008, and the Accounts and Audit Regulations 2003 (as amended by the 2006 Regulations).

2. Disclosure of Interest Held in Commercial Enterprises


The Authority has no holdings in any commercial enterprise. The Code of Practice on Local Government Accounting requires Local Authorities to prepare Group accounts. The SORP guidance requires Local Authorities to consider their interests in all types of entity (as defined in Local Government Act 1972 Section 270), and if applicable to produce Group accounts. After following the SORP guidance, it was deemed correct to account for the MPTE as if it were a subsidiary of the Authority. Under FRS2 this requires consolidation on a line-by-line basis. Consolidation is therefore with the Authority and the MPTE’s own Group accounts.

The Executive has a number of trading and dormant subsidiaries. Details of those companies are disclosed in the accounts of the MPTE and copies can be viewed at www.merseytravel.gov.uk or on request from 24 Hatton Garden, Liverpool, L3 2AN.

3. Balance Sheet

This includes the balances of all the direct Services of the Merseyside Integrated Transport Authority and the Passenger Transport Executive balances (see note 2).

4. Capital Outlay


All transactions relating to Capital outlay are accounted for on an accruals basis. Expenditure on fixed assets is capitalised provided that the fixed asset yields benefits to the Authority and the services it provides, for a period of more than one year. This excludes expenditure on routine repairs and maintenance of fixed assets which is charged direct to the revenue account.

5. Asset Valuation


The freehold and leasehold properties which comprise the Authority's property portfolio were valued in a quinquennial valuation as at 31 March 2009, on the following basis:-
• land, operational properties and other operational assets are included in the balance sheet at the lower of net current replacement cost and net realisable value in respect of current use
non-operational assets, being assets that are surplus to requirements, are included in the balance sheet at the lower of net current replacement cost and net realisable value. In the case of any future investment properties this will normally be open market value
• infrastructure assets and community assets are included in the balance sheet at historical cost net of depreciation
For each of the five years between formal valuations, the historical value of new capital investment will be assumed to be at current values, with appropriate adjustments being made in the accounts at the next formal quinquennial valuation.




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