The following items have been charged/(credited) to the income statement in arriving at the group's operating profit:
|Other operating costs|
|Hired and contracted services||96.6||112.2|
|Loss on disposal of property, plant and equipment||13.9||3.9|
|Cost of properties disposed||0.4||4.7|
|Settlement of commercial claims||–||(9.9)|
|Allowance for expected credit losses – trade and other receivables|
|Allowance for expected credit losses – trade and other receivables (see note 15)||41.8||26.5|
|Depreciation and amortisation expense|
|Depreciation of property, plant and equipment: owned assets (see note 10)||441.6||357.3|
|Amortisation of intangible assets (see note 11)||41.2||35.9|
Included within depreciation of property, plant and equipment for the current year is £82.3 million relating to the accelerated depreciation of certain bioresources assets, primarily incineration assets at the group's Mersey Valley Sludge Processing Centre, known as Shell Green. These assets have been fully depreciated in the year following a strategic bioresources review, as the likelihood of the group deriving future economic benefit from them is now considered remote in light of improvements in alternative lower-cost and more environmentally friendly processes. In addition to this, inventory spares held for use by these assets have been written down to £nil.
During the current year, the group incurred operating costs of £19.2 million relating to the COVID-19 pandemic, comprising £16.7 million in relation to allowances for expected credit losses in respect of household trade receivables and £1.4 million allowances for expected credit losses in respect of non-household trade receivables.
Property rates expenses in the current year include the impact of an £8.1 million refund in relation to rates paid in previous years resulting from a revision to the rateable value of the group's water assets as agreed with the Valuation Office Agency (VOA). This reduction ensures that the cumulative property rates paid by the group are appropriately recorded. In addition to this, accrued property rates relating to wastewater assets have been reassessed during the current year resulting in an £8.2 million reduction in rates costs reflecting properties identified as being non-rateable and management's revised estimate of the likely rates payable on properties whose rateable values are yet to be assessed.
During the current year, operating costs of £3.1 million and infrastructure renewals expenditure of £4.7 million were incurred in response to Storms Ciara and Dennis that occurred in February 2020.
During the prior year, as a result of the group's response to a severe dry weather event, there were £36.1 million of expenses incurred, comprising £24.2 million of other operating costs, £10.1 million of infrastructure renewals expenditure and £1.4 million of employee costs (see note 3).
Research and development expenditure for the year ended 31 March 2020 was £1.0 million (2019: £1.2 million)
During the year, the group obtained the following services from its auditor:
|Statutory audit – group and company||119||97|
|Statutory audit – subsidiaries||355||340|
|Regulatory audit services provided by the statutory auditor||62||47|
|Other non-audit services||77||65|