The Learning and Skills Councils Annual Report and Accounts for ...

Year-end position
11. The net book value of fixed assets
at 31 March 2010 increased from
£80.1 million to £91.8 million as
the LSC continued to invest in
the IT systems that will provide
the platform for the delivery of
programmes in the post-LSC
landscape.
12. At 31 March 2010, the LSC had
receivables of £240.5 million
(31 March 2009: £248.9 million),
reflecting a fall in the level of FE
college debtors as the value of
outstanding advances of funds
contracted relative to last year.
13. At 31 March 2010, the LSC held
cash balances of £151.0 million
(31 March 2009: £111.3 million),
including funds drawn from the
European Social Fund (ESF) as well
as grant-in-aid. BIS authorised
a working balance of 1 per cent
of the annual resource budget
throughout each financial year.
At 31 March 2010 the balance
of BIS and DfE funds amounted to
£7.3 million or 0.06 per cent
(31 March 2009: 0.4 per cent)
with the sharp reduction in value
reflecting the clearing of creditors
ahead of the closure of the LSC.
14. At 31 March 2010, the LSC had
payables of £491.8 million
(31 March 2009: £561.2 million),
with the reduction attributable
to a fall in outstanding amounts
due to FE colleges and in
creditors across a range of other
programmes.
15. International Financial Reporting
Standard (IFRS) 7 requires
organisations to disclose
information on the significance
of financial instruments to their
financial position and performance
and this is shown in notes 15 and
21 to the accounts.
16. The most significant credit risk to
the LSC has arisen from the failure
of learners to repay loans provided
to them under the Professional
and Career Development Loan
programme. In such circumstances,
the LSC has had an obligation
to fund the cost of the default
to the bank that provided the
loan. The situation for 2009–10
is as described in note 15 to the
accounts.
17. Additional significant credit risk
to the LSC has arisen from the
non-payment of debts owed by
private sector training providers
that are contracted to provide
training services. The likelihood of
such an eventuality is mitigated
by monthly reconciliation of a
provider’s entitlement to funding
and subsequent amendment to
future funding in the demandled
system. The financial impact
of this is largely attributable to
provider insolvency and the overall
financial impact is currently not
material – see note 23 to the
accounts.
18. The remaining balances of the
LSC transferred to the Skills
Funding Agency, YPLA and BIS
on 1 April 2010. Note 16 to the
accounts shows what balance
is attributable to each receiving
organisation as part of its opening
Statement of Financial Position.
Development and
performance
19. The accounts cover the period
from 1 April 2009 to
31 March 2010.
20. The majority of the LSC’s funding
was grant-in-aid from government.
In 2009–10, this amounted to
£12,937.0 million (2008–09:
£11,894.9 million).
21. The largest source of income was
the ESF, which contributed £239.7
million (2008–09: £159.0 million).
22. The Treasury requires nondepartmental
public bodies
(NDPBs) to disclose the full
costs of their activities in their
accounts. The LSC has included
notional income of £9.0 million
(2008–09: £10.4 million) for the
cost of capital in its accounts. This
is based on a rate of 3.5 per cent
(2008–09: 3.5 per cent). See also
‘Cost of capital’ – note 8 to the
accounts.
18 LSC Annual Report and Accounts 2009–10