Note 18 to the Departmental Resource Accounts
18. Provisions for liabilities and charges
| Description | Early departure costs £000 |
Other £000 |
Total £000 |
|---|---|---|---|
| Balance at 1 April 2010 | 24,830 | 4,089 | 28,919 |
| Provided in the year | 3,655 | 3,615 | 7,270 |
| Provisions not required written back (Note a) | (11,320) | (1,498) | (12,818) |
| Provisions utilised in the year | (6,652) | (1,085) | (7,737) |
| Unwinding of discount | 285 | - | 285 |
| Balance at 31 March 2011 (Note b) | 10,798 | 5,121 | 15,919 |
| Description | Early departure costs £000 |
Other £000 |
Total £000 |
|---|---|---|---|
| Balance at 1 April 2009 | 13,581 | 2,802 | 16,383 |
| Provided in the year | 14,690 | 2,986 | 17,676 |
| Provisions not required written back | (241) | (917) | (1,158) |
| Provisions utilised in the year | (3,381) | (782) | (4,163) |
| Unwinding of discount | 181 | - | 181 |
| Balance at 31 March 2010 | 24,830 | 4,089 | 28,919 |
Analysis of expected timing of discounted flows
| Description | Early departure costs £000 |
Other £000 |
Total £000 |
|---|---|---|---|
| Not later than one year | 3,328 | 4,482 | 7,810 |
| Later than one year and not later than five years | 6,145 | 639 | 6,784 |
| Later than five years | 1,325 | - | 1,325 |
| Balance at 31 March 2011 | 10,798 | 5,121 | 15,919 |
Note a - £11.320 million of provision for early departure costs was released during the year, following a review of the source data and a change in the estimation technique used to assess the liability. Early retirement provisions are now calculated on the basis of amounts actually paid, rather than on the basis of estimates made at the point of departure (see Note 1.18).
Note b - The balance comprises £7.810 million current liabilities and £8.109 million non-current liabilities.
Early departure costs
The CPS meets the additional costs of benefits beyond the normal PCSPS benefits in respect of employees who retire early by paying the required amounts annually to the PCSPS over the period between early departure and normal retirement date, discounted by the HM Treasury discount rate of 1.8 per cent in real terms. The discount rate changed to 2.9 per cent with effect from 31 March 2011.
Other provisions
Other provisions comprise outstanding compensation claims for personal injury, employment tribunal legal claims and dilapidation claims served by landlords at the expiry of a lease on a property occupied by the CPS. In respect of compensation claims, provision has been made for the litigation against the Department. The provision reflects all known legal claims where legal advice indicates that it is more than 50 per cent probable that the claim will be successful and the amount of the claim can be reliably estimated. Expenditure on employment tribunal claims is likely to be incurred within one year and on personal injury claims within two years. Dilapidations claims are analysed as payable within one year. Legal claims which may succeed but are less likely to do so or cannot be estimated are disclosed as contingent liabilities in Note 2. All dilapidation claims received or anticipated from landlords are provided for. Where a claim has yet to be submitted, an estimate of the cost of the claim is provided by the CPS managing agents. Other provisions are assessed quarterly. The balances for 'provided in year' and 'written back' therefore reflect the quarterly movements in provision.
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