Statement of Accounts 2016-17

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Statement of Accounts 2016-17 Cheshire West & Chester Council Statement of Accounts 2016-17 Visit: cheshirewestandchester.gov.uk 2016-17 Statement of Accounts Contents Page Narrative Report 3 Statement of Responsibilities for the Statement of Accounts 15 Annual Governance Statement 16 Independent auditor’s report 33 Core financial statements • Comprehensive Income and Expenditure Statement 36 • Movement in Reserves Statement 37 • Balance Sheet 39 • Cash Flow Statement 40 Notes to the core financial statements 1. Significant accounting policies 41 2. Expenditure and Funding Analysis 59 3. Accounting standards 64 4. Critical judgements 65 5. Assumptions made about the future and other major sources 67 of estimation uncertainty 6. Material items of income and expense 69 7. Events after the Balance Sheet date 69 8. Adjustments between accounting basis and funding basis 70 under regulations 9. Transfers to/from Earmarked Reserves 72 10. Other operating income and expenditure 73 11. Financing and investment income and expenditure 74 12. Taxation and non-specific grant income 74 13. Other comprehensive income and expenditure 75 14. Property, plant and equipment 76 15. Heritage assets 80 16. Investment properties 82 17. Asset held for sale 84 18. Financial instruments 85 19. Debtors 91 20. Cash and cash equivalents 92 21. Creditors 92 22. Provisions 94 23. Usable reserves 96 24. Unusable reserves 98 25. Cash Flow Statement - Operating activities 103 26. Cash Flow Statement - Investing activities 104 27. Cash Flow Statement - Financing activities 104 28. Trading operations 105 29. Agency services 106 30. Members' allowances 107 31. Officers remuneration 108 32. Audit costs 111 33. Dedicated Schools Grant 111 34. Grant income 113 35. Related party transactions 115 36. Better Care Fund 119 37. Capital Expenditure and Financing 121 38. Leases 122 1 2016-17 Statement of Accounts 39. Private Financing Initiative (PFI) 124 40. Impairment loss 128 41. Capitalisation of borrowing costs 128 42. Pension schemes (Defined Contribution Scheme) 129 43. Defined schemes (Benefit Pension Scheme) 129 44. Contingent Liabilities 136 45. Contingent Assets 137 46. Risk arising from financial instruments 137 47. Interests in companies 142 48. Trust funds 149 49. Comparative information 150 The Housing Revenue Account 151 Collection Fund 156 Pension Fund accounts 159 Group Accounts 216 Glossary of terms 230 2 2016-17 Statement of Accounts Narrative Report The Statement of Accounts is produced annually to give electors, local taxpayers, Members of the Council, employees and other interested parties clear information about the Council’s finances. The narrative report is designed to provide an explanation of the Council’s financial position and to assist in the interpretation of the financial statements. It also contains additional information about the Council in general and the main influences on the financial statements to provide a link between the Councils activities and challenges and how these impact on its financial resources. The narrative report is structured as follows: 1. About Cheshire West and Chester 2. Strategic priorities 3. Key achievements 4. Summary of financial performance 5. Main issues from the 2016-17 accounts 6. Explanation of the financial statements 1. About Cheshire West and Chester Cheshire West and Chester is a unitary authority with a population of 333,900 and covers 350 square miles. The borough is located in the North West of England and includes the historic city of Chester and the industrial and market towns of Ellesmere Port, Frodsham, Helsby, Malpas, Neston, Northwich and Winsford. About a third of the population lives in rural areas. The Council is responsible for ensuring a wide range of services are provided to the residents, businesses and visitors to the Borough. These include education, safeguarding vulnerable children and adults, social care, public health, highways, leisure, culture, waste collection, planning, housing benefits, regeneration and community engagement. In addition to providing or commissioning services the Council is also responsible for the collection of local taxation in the form of Council Tax and Non Domestic Rates on behalf of itself and local agencies such as Police and Fire authorities. The Council is a politically-led organisation and has adopted a Leader and Cabinet model. It has 75 elected members representing 50 wards across the Borough. The current political make-up of the Council is shown below. The vacant Councillor position was filled in April through a local by-election and won by Labour. 3 2016-17 Statement of Accounts 2. Strategic Principles and Priorities Cheshire West and Chester Council is an innovative organisation that seeks to pioneer new and improved ways of delivering services. As an ambitious Council we are determined to deliver the best possible services, improve the quality of life for all residents and help to tackle disadvantage. Cheshire West and Chester Council has developed and launched a new plan for 2016-2020 called ‘Helping the Borough Thrive’. The Council Plan sets out the Council's vision, what it wants to achieve, and the way its staff will work. The plan is structured through ten outcomes across the three key focus areas of Residents, Communities and Economy. Thriving Residents • All of our families, children and young people are supported to get the best start in life • Vulnerable adults and children feel safe and are protected • Older people and vulnerable adults are compassionately supported to lead fulfilled and independent lives Thriving Communities • Cleanest, safest and most sustainable neighbourhoods in the country • Good quality and affordable housing that meets the needs of our diverse communities • Vibrant and healthy communities with inclusive leisure, heritage and culture opportunities • Our resources are well managed and reflect the priorities of our residents Thriving Economy • People are well educated, skilled and earn a decent living • A great place to do business • A well connected and accessible borough The Council Plan is fully joined-up with other key plans and strategies across the borough. The plan has been developed alongside the four year budget plan to ensure that resources are in place to deliver the ten outcomes. 4 2016-17 Statement of Accounts Financial Scenario In common with all Local Authorities, Cheshire West and Chester needs to manage a situation where the costs and demands of services are growing but the amount of funding available is reducing. Since the Comprehensive Spending Review of 2010 Central Government funding to the Council has significantly reduced and it is expected that by 2020 all discretionary spend by the sector will be 100% reliant on locally generated income. Against this backdrop the Council needs to manage growing demand for services, inflationary pressures, a need to invest in the local economy to promote growth and a desire to continually improve services. The gap resulting from reduced government funding and increasing expenditure is expected to be around £42.6m for the period 2017 to 2020. A three year plan to bridge the £42.6m funding gap has been produced but with careful consideration of the impact of any decisions on the ten priorities outlined in the Council Plan. The key areas that have been considered are: • Reviewing future service provision within the context of the impact the service makes to the Council’s stated outcomes and the optimum delivery mechanism to secure savings and continue to have a positive impact on the outcome; • Opportunities for delivering savings by sharing with others and working across partner boundaries; • Identifying the growth opportunities that exist within the Borough; • Identifying the opportunities available to the Council owned Companies; • Opportunity for reducing inequality across the Borough. 5 2016-17 Statement of Accounts 3. Key achievements The following table highlights the key areas of Council performance: Thriving Residents • All of our families, children • Continued take up of free early education for eligible 2 and young people are year olds in the top 30% of deprived areas has been supported to get the best averaging over 100% (taking population changes into start in life account) in 2016-17 • 348 complex families achieved a significant and sustained positive outcome • Public Health services focused on prevention supporting residents to stop smoking, improved flu vaccination rates in high risk groups and helping children achieve a healthy weight • There has been a rise in the proportion of people engaged with weight management services achieving at least a 5% weight loss, up from 31% in 2015/16 to 56% in 2016-17 • The latest smoking data shows that 13.1% of adults are currently smoking, a drop of over 6 percentage points and over 5 percentage points below target. • Vulnerable adults and • Looking after 484 children in care children feel safe and are • The number of Care Leavers living in suitable protected accommodation reported at 97% against the target of 90% and against the latest national average of 81%. • Older people and vulnerable • The number of carers given information, advice or adults are compassionately signposted to other universal services was 897 supported to lead fulfilled against a target of 730 and independent lives • Proportion of adults with a learning difficulty who live in their own home or with their family has fallen slightly to 82.9% • There has been a reduction of almost 100 cases of long-term support needs being met by admission to residential/nursing
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