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Pre-Audit Statement of Accounts 2020 to 2021

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Pre-Audit Statement of Accounts 2020 to 2021 Public Pre-Audit Statement of Accounts 2020-21 Peter Handford BA(Hons) PGCert FCPFA Director of Finance & ICT Version History Version Date Detail Author 1.0 30.07.21 Pre-audit accounts for signature and E Scriven publication S Holmes This document has been prepared using the following ISO27001:2013 standard controls as reference: ISO Control Description A.8.2 Information classification A.7.2.2 Information security awareness, education and training A.18.1.1 Identification of applicable legislation and contractual requirements A.18.1.3 Protection of records A.18.1.4 Privacy and protection of personally identifiable information CONTENTS PAGE Narrative Report 2 Statement of Responsibilities for the Statement of Accounts 31 Comprehensive Income and Expenditure Statement 32 Balance Sheet 33 Cash Flow Statement 34 Movement in Reserves Statement 35 Notes to the Core Financial Statements 36 Accounting Policies 130 Auditor’s Opinion - Derbyshire County Council Accounts 157 Pension Fund Accounts 161 Auditor’s Opinion - Pension Fund Accounts 221 Glossary of Terms 224 Contact Information 240 Annual Governance Statement 241 1 NARRATIVE REPORT Introduction This Statement of Accounts presents the overall financial position of the Council for the year ended 31 March 2021. It has been produced in compliance with the Chartered Institute of Public Finance and Accountancy (CIPFA) Code of Practice on Local Authority Accounting (the Code), based on International Financial Reporting Standards (IFRS). IFRS are made up of a combination of many individual accounting standards. This document also includes information relating to the Derbyshire Pension Fund, which the Council administers on behalf of its own staff, local authorities and other admitted bodies. Basis of Preparation and Presentation When preparing the accounts, an authority need not comply with the Code if the information is not material to the “true and fair” view of the financial position, financial performance and cash flows of the authority and to the understanding of users. Information is material if omitting it, or misstating it, could influence decisions that users make on the basis of financial information about a specific authority. The Accounting Policies of the Council have been prepared in accordance with IFRS, as adopted by the Code. Where there is no specific guidance in the Code, the Council has developed its own Accounting Policies, which are aimed at creating information which is relevant to the decision-making needs of users and reliable, in that the financial statements: represent fairly the financial position, financial performance and cash flows of the entity; reflect the economic substance of transactions, other events and conditions and not merely the legal form; are neutral i.e. free from bias; are prudent; and are complete in all material respects. The Council’s Accounting Policies outline how the Council should account for all income, expenditure, assets and liabilities held and incurred during the 2020-21 financial year. The Accounting Policies of the Council are updated annually to reflect any changes in IFRS, including changes in International Public Sector Accounting Standards (IPSAS), HM Treasury guidance, CIPFA guidance or any other change in statute, guidance or framework impacting on the Council’s accounts. The Accounting Policies of the Council, as far as possible, have been developed to ensure that the accounts of the Council are understandable, relevant, free from material error or misstatement, reliable and comparable. 2 NARRATIVE REPORT Explanation of the Accounting Statements which follow Comprehensive Income and Expenditure Statement (CIES) - This shows the cost of providing services in accordance with generally accepted accounting practices. Balance Sheet (BS) - This shows the value of all assets and liabilities. Reserves are matched against net assets and liabilities. Cash Flow Statement (CFS) – This statement shows the changes in cash and cash equivalents of the Council. Movement in Reserves (MiRS) – This shows the movement on the different reserves held, analysed into ‘usable reserves’ (i.e. those that can be applied to fund expenditure) and ‘unusable’ reserves. Notes to the Accounts – Not a statement, however they provide supplementary information. Performance Local authorities can present the breakdown of services within the CIES based on how an authority is organised and funded. The Council has, therefore, presented its CIES on the basis of how it reports its management accounts during the financial year, which is by Cabinet Member Portfolio. The Council is structured into four departments but up until May 2021 reported through seven Cabinet Member Portfolios. These portfolios were Adult Care, Clean Growth and Regeneration, Corporate Services, Health and Communities, Highways, Transport and Infrastructure, Strategic Leadership, Culture and Tourism and Young People. After May 2021, the portfolio structure changed, and the seven Cabinet Member Portfolios were increased to nine Cabinet Member portfolios. These portfolios, from May 2021 on, are Adult Care, Children’s Services and Safeguarding, Clean Growth and Regeneration, Corporate Services and Budget, Education, Highways Assets and Transport, Infrastructure and Environment and Strategic Leadership, Culture, Tourism and Climate Change. Revenue Expenditure The Council set its net budget requirement for 2020-21 on 5 February 2020 and originally planned to spend £560.211m, with funding coming in the form of Government non-ring-fenced grants of £182.665m, Council Tax of £342.663m, business rates collected locally of £20.067m and the use of Earmarked Reserves of £14.816m. In 2020-21 the Council has spent £553.375m, against a final net budget of £581.005m. The increase in net budget is because of additional general grant income of £60m, the majority of which relates to general Covid-19 grants, additional Business Rates Relief Grant £2.661m and Independent Living Fund Grant £2.534m, and £4m additional business rates income, less additional net transfers to Earmarked and General Reserves of £43m. 3 NARRATIVE REPORT Of the £43m net transfer to Earmarked and General Reserves in 2020-21, the main reserves movements were transfers to reserves of £17.289m of revenue contributions to capital, where borrowing and available capital receipts were used instead; £15.000m to establish a fund to support the Council’s and wider County recovery from the impacts of the Covid-19 pandemic; £11.248m to carry forward the unspent balance of the Council’s general Covid-19 emergency funding for Local Government at 31 March 2021; £11.028m to increase schools’ reserves, especially for primary schools, funded from the Dedicated Schools Grant, and a transfer from reserves of £13.897m to fund the refurbishment of homes for older people. The table below summarises the Council’s revenue outturn for 2020-21, compared to controllable budget, highlighting the Cabinet Member Portfolio and Corporate net underspends. The overall Council underspend for 2020-21 is £27.630m, after accounting for use of £33.565m of the £45.037m of Ministry of Housing Communities & Local Government (MHCLG) Covid-19 pandemic emergency grant funding awarded, and £2.349m of compensation for lost sales, fees and charges income claimable under the Government scheme announced on 2 July 2020. An additional £0.224m from this grant funding has been contributed to the General Reserve to reimburse Covid-19 impacts experienced in 2019-20. Spending on schools is funded by the Dedicated Schools Grant (DSG), from Government. The Council received £361.664m in 2020-21. Note 38 sets out the DSG grant in more detail. The Council also has responsibility for Public Health funding. A total of £42.175m was received in 2020-21, in the form of a ring-fenced grant from Government, to pay for Public Health services. There was an underspend against the balance of the grant of £1.107m. The outturn table shows the positions net of the impact of these grants, other ring-fenced grants and income from other third parties and their associated spend. 4 NARRATIVE REPORT Final Net Budget Actual Outturn £m £m £m Controllable: Adult Care 273.759 257.889 (15.870) Corporate Services 49.080 49.314 0.234 Clean Growth and Regeneration 1.328 1.181 (0.147) Health and Communities 5.291 4.307 (0.984) Highways, Transport and Infrastructure 80.632 80.769 0.137 Strategic Leadership, Culture and Tourism 14.283 13.576 (0.707) Young People 126.475 129.864 3.389 Portfolio Outturn 550.848 536.900 (13.948) Risk Management 9.442 0.000 (9.442) Debt Charges 34.965 31.713 (3.252) Interest and Dividends Receivable (5.822) (6.146) (0.324) Levies and Precepts 0.343 0.339 (0.004) Corporate Adjustments (8.771) (9.431) (0.660) Total Outturn Position 581.005 553.375 (27.630) Transfers to / from reserves: RCCO - Capital Funded from Revenue 0.000 0.000 0.000 Transfer to Earmarked Reserves 133.374 133.374 0.000 Transfer from Earmarked Reserves (102.006) (102.006) 0.000 Use of General Reserves (14.692) (14.692) 0.000 Contribution into General Reserve 11.180 38.810 27.630 608.861 608.861 0.000 Financed By: Council Tax (342.663) (342.663) 0.000 Revenue Support Grant (13.738) (13.738) 0.000 Business Rates (23.704) (23.704) 0.000 Business Rates Top-up (94.892) (94.892) 0.000 Business Rates Relief Grant (7.185) (7.185) 0.000 New Homes Bonus (2.326) (2.326) 0.000 Other General Revenue Grants (113.849) (113.849) 0.000 PFI Grant (10.504) (10.504) 0.000 (608.861) (608.861) 0.000 Of the £13.948m portfolio underspend in 2020-21, the significant variances were an underspend of £15.870m on the Adult Care portfolio and a £3.389m overspend on the Young People portfolio. 5 NARRATIVE REPORT The underspend on the Adult Care portfolio is mainly due to Government providing £14.317m of funding to meet the cost of all hospital discharges from March 2020 to September 2020 and up to the first six weeks of packages for all discharges from October 2020.
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