Annual Financial Information
Summary of the 2013/14 Financial Year
Financial performance in 2013/14 saw a £57,192 increase in the General Fund balance despite a 6% reduction in National Park Grant. The financial performance benefitted from higher earned income and significant cost savings compared to Budget (benefit £104,392) and budget under spends (£220,800), the latter being carried forward into the 2014/15 budget.
It is good to report that the Authority overachieved its targets for base budget cost reduction during the year, identifying a number of ongoing savings particularly in its core operating budgets. The majority of the budget savings were in salaries and staff-related expenditure, with a number of vacancies not being filled in anticipation of the need to make further savings in response to further National Park grant cuts.
Further National Park grant cuts were announced in December 2013, these were on top of those already planned. The cuts saw further reductions of 2.3% in 2014/15 and 1.7% in 2015/16. The overall grant reduction for 2014/15 is now an 8.5% (£236,482) reduction, followed by a further 1.7% reduction in 2015/16 (£44,189). Defra has stated it hopes to avoid further grant reductions, but the grants are still subject to revision and as such continue to be included in the Authority's Strategic Risk Register.
To meet the challenge of grant reductions, the Authority will continue to target and achieve cost savings, but it is also focused on increasing its earned income from other sources to reduce its dependence on its core National Park grant. During the year, the National Park achieved a £58,700 increase in its budgeted net income through new income generation initiatives, this was 40% higher than the target. An income generation plan is now in place for the next three years, with the agreed targets built into the budget and staff objectives.
Despite the reductions in its core National Park grant, the Authority was able to increase its expenditure on projects during the year by £701,809, although an increase in grant support from other partners and stakeholders reduced the net cost to £248,112. The increased financial support for our partners and stakeholders demonstrates the key enabling role the Authority plays in formulating projects which enhance the National Park, as well as the importance of partnership working to the achievement of our objectives.
The major net investment (£185,788) was in the development of the Sill, a project which aims to build a new National Landscape Discovery Centre, in partnership with the Youth Hostel Association (YHA) (England and Wales) at Once Brewed along Hadrian's Wall. The project is being developed with the support of the Heritage Lottery Fund. Phase 1 is nearing completion with planning approval applied for at April 2014. An application for the funding to build the Sill will be made to the Heritage Lottery Fund in October 2014. Earmarked reserves of £900,000 have been set aside in the accounts to cover the Authority's financial contribution to the Sill from 2015 onwards, should it proceed as planned.
The last triennial Actuarial Pension Valuation was undertaken as at the 31st March, 2013. As a result the long-term pension funding deficit reduced at the 31st March, 2014, by £1,220,000 to £2,720,000. The improvement was the result of higher asset valuations and took into account the impact of the significant changes made to the Local Government Pension Scheme which were introduced on the 1st April, 2014. The Authority will continue to pay down this deficit by:
- continuing to reduce the historical liability with annual fixed payments of £77,000;
- and reducing the variable debt on future pension liabilities by increasing its contribution to 15.1% (was 14.2%) of staff salary costs based on actuarial advice
During the year the General Fund and Useable Reserves increased by £57,192 to £2,339,955; however after allowing for earmarked reserves and unusable reserves the overall level of unallocated reserves reduces to £495,904. This level of unallocated reserves allows the Authority to retain some flexibility to react to any future financial challenges such as those faced through reducing Defra National Park grant in recent years.
The Authority continues to focus on its priorities with the aim of achieving excellence in three key priority areas:
- Land Management;
- Rural Development;
- Youth Engagement;
In addition, the Authority is committed to developing the new Sill National Landscape Discovery Centre as a means of delivering its stated priorities and transforming the wider public engagement with landscape.
Despite the significant reductions to staffing and financial resources seen in recent years, both within the Authority and within many of our partners, the Authority remains ambitious, forward-looking and is delivering strongly in a number of key areas. Key achievements in the past year have been the development of The Sill National Landscape Discovery Centre proposals, the delivery of a wide range of initiatives to engage young people with the National Park and our programmes, and the successful delivery of the first year targets for a new earned income programme. Further details on our plans and performance are provided within the reports that can be found on the Authority's website at:
We continue on our journey to become a more enabling Authority, working in partnership with others. The increased level of partnership funding, and an overall improvement in Corporate Plan delivery, show we are making good progress along this path. With our partners, we will continue to improve the National Park in line with our collectively agreed Management Plan, and we will continue to develop our staff and to find new and innovative ways of working to meet the challenges of the future.
Northumberland National Park Authority manages its finances through a medium term financial plan. The key financial indicators are shown below ...
To view the authority's Statement of Accounts 2013/14, click here.