STATEMENT OF ACCOUNTS 2019/2020 As approved by Audit and Governance Committee on 17 March 2021 Contents Section Page 1. Narrative Report 1 2. Statement of Responsibilities for the Statement of Accounts 25 3. Comprehensive Income and Expenditure Statement 27 4. Movement in Reserves Statement 29 5. Balance Sheet 31 6. Cash Flow Statement 33 7. Notes to the Financial Statements - Expenditure and Funding 35 Analysis 8. Other Notes to the Financial Statements 37 9. Collection Fund 115 10. Group Accounts 118 11. Annual Governance Statement 133 12. Independent Auditors’ Report to the Members of Sefton 157 Council 13. Glossary 161 14. Abbreviations 169 15. Useful Addresses 171 Sefton MBC Statement of Accounts 2019/20 Narrative 1 NARRATIVE REPORT Introduction Sefton is a Metropolitan Borough Council, providing the full range of local authority services to the residents of Sefton. These services include planning, licensing, street cleansing, highways maintenance, and refuse collection, as well as safeguarding vulnerable children and helping older people retain their independence. Located on the west coast of England between Liverpool in the south and Lancashire in the north / northwest, the Council covers the area from Bootle in the South, through Seaforth, Waterloo, Crosby, Thornton, Altcar, Ince Blundell, Lunt, Freshfield and Formby, up to and including Birkdale, Ainsdale, Southport and Crossens in the North. It also includes the areas of Maghull, Lydiate and parts of Melling and Aintree. It is responsible for providing services to approximately 276,000 residents, local businesses and industry. As a local authority, Sefton is accountable to Central Government and the electorate. It is responsible for continuously looking to improve its services to ensure that it meets the needs of the local community. Each service must ensure that the local taxpayers are receiving "value for money" by delivering high quality outcomes. The Council has continued to face significant financial challenges in 2019/2020. As a result of the Government’s austerity program, the Council’s core grant funding has been reduced year on year since 2010/2011. By 2019/2020 core Government grant funding had reduced by more than 50%. The Council has also seen a rise in demand for statutory services, most notably social care services provided to vulnerable adults and children. As a result of the cuts in grant funding, local authorities are now more reliant on local sources of income such as Council Tax and Business Rates with the Council participating in the Liverpool City Region Business Rates Pilot scheme which has delivered around £3.0 million of additional income in 2019/2020. In 2017, the Council agreed a three-year medium-term financial plan covering the period from 2017/2018 to 2019/2020. This plan identified the need to make a further £64 million of savings over this period, on top of the £169 million of savings that had already been made since 2010/2011. The impact of these savings requirements has required a radical change to the way that the Council operates and provides services. To facilitate this change, the Council undertook a major consultation exercise in 2016 to identify the areas that local residents thought the Council should prioritise for use of its resources (Sefton 2030 Vision and Council Core Purpose). The outcome of this consultation is summarised later in this document. The Council also invited the LGA to undertake a peer group review which was undertaken in September 2018. In order to facilitate the changes required to meet the Council’s future priorities, we have developed a Framework for Change program. This program covers four main strands, Economic Growth, Public Sector Reform, Service and Corporate Savings Options, and Strategic Investment. An overview of Framework for Change is also provided later in this document. However, the current Coronavirus (COVID-19) crisis has had a significant impact on the provision of services and has reduced the level of funding that the Council can expect to raised funding through council tax, business rates, fees and charges. This has introduced a great deal of uncertainty about the Council’s future funding in 2020/2021 and beyond. Coronavirus (COVID‑19) The coronavirus pandemic has affected all our lives over the past few months resulting in a most complex set of circumstances. Protecting the health of our staff, members of our community, and visitors to our area, whilst continuing to provide vital services to the most vulnerable has been our priority during this crisis. We have done this in partnership with the Government, other local councils, partner agencies and businesses. We have also provided extensive communications to help our community deal with the effects of the pandemic and are planning for the recovery phase. Sefton MBC Statement of Accounts 2019/2020 Page 1 Narrative A presentation was made to the Cabinet members in June that summarised the Council’s Response to COVID-19 in the first 3 months since the lock down was announced on 23 March 2020. Regular reports have been presented to Cabinet since. The key points from that presentation are highlighted below: Response Structures In the first stages of response, the Council established a Strategic Coordination Group (SCG), chaired by the Chief Executive and comprising the Executive Leadership Team, Heads of Service, key specialists, representatives from each Council service area, and partner organisations such as the police and Clinical Commissioning Group (CCG). The SCG coordinated the Council’s response in alignment with the Merseyside Local Resilience Forum (MRF), which has implemented established and well-rehearsed emergency planning governance arrangements to coordinate a multiagency response. The Council receives, reviews and distributes daily updates from HM Government and various departments, including from the daily press conferences, to ensure immediate interpretation of national and regional guidance to inform and support response. How the Council has responded In the first three months since the lockdown was announced on 23 March 2020, the council has: • Maintained core services e.g. social care, refuse collection, highways maintenance, public health, registrar services, planning, economic development and business support. • Closed some services e.g. Libraries, Leisure Centres, Atkinson (Arts Centre and Theatre) • Provided support to more than 3,000 clinically vulnerable shielding residents including emergency food support, basic care needs and delivery of medicines. • Opened a virtual contact centre - available 7 days a week plus online emergency cover. • Supported more than 100 care homes. Ensuring that vulnerable adults are safe. Including an immediate resource injection, daily calls to care homes, addressing concerns about future viability. Providing an integrated social work response to vulnerable residents. • Ordered more than 2 million items of personal protective equipment. • Supported schools and nurseries that have remained open to educate the children of key workers. • Arranged temporary accommodation for 140 homeless households. • Transitioned staff to home working were possible. • Redeployed over 500 staff. • Registered over 1,000 Sefton residents as volunteers, who along with Sefton Councillors have been actively involved in contacting over 3,000 households. • Delivered in partnership the first mobile covid-19 testing centre in Cheshire and Merseyside, with more than 3,500 tests carried out and almost 1,000 lab-confirmed positive cases in Sefton. • Paid almost £45 million of business support grants to more than 4,000 businesses. • Reissued more than 1,500 business rate bills to ensure local businesses benefit from additional new business rate reliefs. • Awarded more than £2.3million of COVID-19 council tax discounts to over 15,000 low income households. Economic Impact The economic impacts on Sefton has been immediate and severe with 27,700 jobs furloughed in the borough, and support being provided to 8,500 self-employed individuals, a substantial increase in those claiming Universal Credit (in excess of the Liverpool City Region average), with a disproportionate impact on the young. The true impact of the pandemic will not be known for several months, however, it is clear that the impact will be felt beyond the medium term and the demand for council services will increase while the council is aiming to support economic recovery. Sefton MBC Statement of Accounts 2019/2020 Page 2 Narrative Impact on Council finances As stated Covid-19 is expected to have an impact on both demand for existing services as well as demand for new services. Adult social care has been disproportionately affected by COVID-19, particularly in relation to the impact on care homes. Children’s Services has also experienced and is forecast to continue to experience significant demand increases. This has led to a significant increase in the cost of service provision. The pandemic is also expected to have an impact on the Councils income streams: - Fees and charges for car parking, leisure facilities, and adult social care are expected to experience significant reductions as a result of the lockdown and subsequent social distancing rules. - Business rates income is expected to reduce as businesses fail or struggle to make payments due to the impact of lockdown or reductions in orders and sales due to reduced demand post lockdown. - Council tax income is expected to reduce as residents lose their jobs or struggle to make payments as a result