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Draft Statement of Accounts for 2020-2021

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Draft Statement of Accounts for 2020-2021 Middlesbrough Council - Draft Statement of Accounts 2020/21 Covid Vaccination Bus – Central Middlesbrough Contents 1. 2. 3. 4. 5. 6. 7. NARRATIVE CORE NOTES TO COLLECTION TEESSIDE ANNUAL GLOSSARY REPORT AND FINANCIAL THE FUND PENSION GOVERNANCE OF TERMS WRITTEN STATEMENTS ACCOUNTS FUND STATEMENT STATEMENTS Narrative Movement in Detailed Income and Pension Report Reserves Notes to Expenditure Fund Statement the Account Statement Accounts of Accounts Independent Comprehensive Notes to the Notes to Auditors report Income and Collection the – Expenditure Fund Pension Middlesbrough Statement Fund Council Independent Balance Sheet Auditors report – Teesside Pension Fund Statement of Cash Flow Responsibilities Statement Middlesbrough Council Statement of Responsibilities – Teesside Pension Fund Page 02 Page 30 Page 36 Page 102 Page 106 Page 145 Page 169 The Statement of Accounts for Middlesbrough Council provides an overview of the Council’s financial position at 31 March 2021 and a summary of its income and expenditure during the 2020/21 financial year. The accounts are, in parts, technical and complex as they have been prepared to comply with the requirements of the Chartered Institute of Public Finance and Accountancy (CIPFA) as prescribed by the Code of Practice on Local Authority Accounting in the United Kingdom, and International Financial Reporting Standards. The accounts are available on the Council’s website: www.middlesbrough.gov.uk under Statement of Accounts. The Council’s Corporate Affairs and Audit Committee will consider the draft Accounts for information on 22 July 2021 under its governance and external financial reporting remit. The External Auditor’s audit results report to the Committee at the end of September will confirm whether the accounts provide a true and fair view of the Council’s financial position and transactions and any issues or amendments made as part of the audit process. Middlesbrough Council Draft Statement of Accounts 2020-21 Page | 1 1. Narrative Report Albert Park Lake Middlesbrough Council Draft Statement of Accounts 2020-21 Page | 2 Narrative Report Review of the Year Middlesbrough Council is a large and diverse public sector organisation. The aim of this Narrative Report is to provide both guidance and context to the accounts, presenting a summary of the Council’s financial position, financial performance and non-financial activities for the year, its prospects for future years and briefly explaining the key accounting statements. A separate summary of accounts document is also available this financial year to ensure that the information in the Statement of Accounts is as accessible as possible, and this is available via the Council’s website (www.middlesbrough.gov.uk). At 31st March 2021, the United Kingdom was starting to emerge from an unprecedented public health pandemic due to Covid-19 following an arduous 12 months with four specific periods of lockdown restrictions. Although most of the long-term effects of the virus are at present still difficult to forecast, a return to normal now seems possible in the latter part of 2021, largely due to the success of the UK vaccination programme. The Narrative Report and the Statement of Accounts will aim to give the appropriate context as to how the Council responded to the pandemic and what impact it has had on the Council’s financial position and performance during the year. It will also consider its future prospects given that a number of local authorities have reported financial problems expected in the short to medium term. Background to the Council Middlesbrough Council came into existence following the abolition of Cleveland County Council in 1996. It is a unitary local authority providing a range of services to the people of Middlesbrough. The Council works with local residents, businesses, public sector partners and the voluntary and community sector to improve local social, economic and environmental wellbeing for all and to secure the long-term sustainability of the town. It is one of the largest employers in the Tees Valley area, providing work for more than 3,000 people. Population and Related Economic Statistics COMPOSITION OF MIDDLEBROUGH POPULATION (141,285) 0 - 15 Years 29,955 65 and Over 23,214 21.20% 16.43% 16 - 64 Years 88,116 62.37% Source: Office of National Statistics Mid-Year Estimates 2020 Middlesbrough Council Draft Statement of Accounts 2020-21 Page | 3 The composition of the local population drives the focus of the services provided by the Council most notably through increasing demand for Children’s and Adult Social Care. Recent years there has been a greater focus on economic growth, particularly in relation to the town centre, and housing. Economic data from Nomis Official Labour Market Statistics for the period January 2020– December 2020 shows the following: Middlesbrough North Great East Britain Gross Weekly Pay (Median) £517.50 £523.50 £587.10 Unemployment rate (16 – 64) (as 7.3% 6.4% 4.6% proportion of economically active) The Council’s various strategies are set around meeting the needs of its residents driven by the demographic profile of the town. Political Structure in 2020/21 The local government elections of May 2019 created real change in the town as it was the first time since its creation in 1996 that the Labour Party has not held control at the Council. This financial year is the second under the leadership of the independent Mayor, Andy Preston, who has developed a new Strategic Plan and ambitions for the Town, supported by Executive Members The Executive is the Council's principal decision making body, considering significant issues in connection with, for example, community safety, leisure, education, social services, highways and the environment as well as making recommendations to Council on the annual revenue budget and investment strategy. The Council had an independent led administration during 2020/21 with a Labour member as Chair of the Overview and Scrutiny Board, which scrutinises the work of the Executive. Meetings of the Executive took place every four weeks chaired by the Mayor with each member of the Executive having designated responsibilities (known as portfolios). These were undertaken virtually from June 2020 to March 2021. Meetings have returned to in person where required from mid-May 2021. Middlesbrough Council consists of 20 wards with between one and three Councillors representing each ward. All councillors serve a maximum four-year term. The political make-up of the Council at 31 March 2021 was: Elected Members 47 Mayor Andy Preston (Independent) 1 Middlesbrough Independent Councillor’s Association 10 Middlesbrough Independent Group 13 Labour 18 Conservative 3 Independent 2 2020/21 has been a unique year for the Council with the ongoing Covid-19 pandemic plus it being the first full year of the new Mayor’s Strategic Plan and priorities. Much of the first half of the year was based on the Council’s response to the first lockdown ensuring that public services continued in a safe and reliable way. There was then particular focuses on distributing grants to businesses to ensure these stayed viable whilst they were closed due to the government restrictions, and also with supporting the vulnerable in the community – many of whom had to shield or were out of work. The Strategic Plan was updated as a result of the expected long term impact of Covid-19 on the Town and many of the priorities have had to be revised to take into account the recovery process from the pandemic. The Council’s Medium Term Financial Plan was continually revised as the financial impact was quantified and new funding streams and initiatives were introduced by central government. The Executive as the main decision making body were also relatively new in their posts with limited local government experience in comparison with the previous administration. 2020/21 was a learning year for the Council and this been significantly influenced by the impact of Covid-19. Middlesbrough Council Draft Statement of Accounts 2020-21 Page | 4 It should also be noted that in April 2021, just after the end of the financial year, that five of the six members of the Executive who had been in post since May 2019 resigned due to some allegations of impropriety against the Mayor. These have been refuted, are currently being investigated by Officers and will be dealt with via the appropriate process if required. The Mayor has recruited a number of new Executive Members and continues to lead the Council and make decisions. The Members who resigned continue to act as ward councillors and backbenchers within the Council Management Structure Leadership Team The senior management structure of the Council at 31st March 2021 is set out below: Chief Executive Director of Adult Director of Director of Legal & Director of Executive Director of Director of Finance Social Care and Environment & Governance Services Regeneration Children's Services (S151 Officer) Health Integration Community Services (Monitoring Officer) Director of Children's Director of Public Health Care Director of Education & Partnerships During June 2020, the Chief Executive implemented a restructure of LMT following the departure of the Strategic Director of Finance, Governance and Support and the early retirement of the Executive Director of Growth & Place. The Chief Finance Officer (S151) role was replaced by a Director of Finance post reporting directly to the Chief Executive. The Executive Director post was not replaced and instead its direct reports, the Director of Regeneration and Director of Environment & Community Services, are now line managed by the Chief Executive. The Mayor’s Ambitions for Middlesbrough and the Strategic Plan Andy Preston is the Mayor and first citizen of Middlesbrough for the period 2019-2023. 2020/21 is the first full year of the Mayor’s Strategic Plan, which was developed during 2019 and agreed by Council in February 2020. In February 2021, the Plan was refreshed to reflect the impact of Covid-19 and the UK’s exit from the European Union on Middlesbrough and on the Council’s strategic priorities.
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